The $225 million Five Star Credit Union of Dothan, Ala., emergedFriday as the successful bidder for the ailing $38 millionFrederica CU of Brunswick, Ga. but what has turned industry headsthis week is the high number of potential bidders: 18 .

There was no explanation from the NCUA about the higher thannormal number but the president/CEO of Five Star, Robert Steensma,said a positive factor is Frederica's branch presence on St.Simon's Island, a popular southeast Georgia tourist haven.

The CU itself, with 3.29% net worth, has endured a toughfinancial road and was on an NCUA emergency purchase list, saidSteensma.

Frederica, which suffered sharp hits on its adjustable ratemortgage portfolio, lost $1 million in 2011 and $1.8 million theyear before.

At a Jan. 19 potential bidders meeting at a Brunswick hotel,there were bidders from all over the South and as far away asMichigan, Steensma said. “We decided we were interested and weapparently made them the most attractive offer,” he said.

Steensma, whose CU was on the NCUA's merger registry as apre-approved suitor, told Credit Union Times that hecounted CEOs and managers “from all over—Navy Federal, Associated,Georgia's Own, Vystar—but as the meeting wore on I could tell fromthe body language which of them were really interested afterhearing about the financials.”

But even before the hearing conducted by Herbert Yolles, theNCUA's Atlanta-based Region III director, Steensma said he couldsize up the competition based on CEOs present versus seniormanagers.

“You kind of knew that if (Navy Federal CEO) Cutler Dawson orany of the other attending CEOs weren't there, they really weren'tas interested,” said Steensma.

He said his CU “was quick on the trigger because we knew itwould be a good fit for us despite the problems and we did agree toa no-cost bid.” That means Five Star CU did not demand upfront NCUAfunds to handle the takeover of a CU which he said had a majorityof its portfolio in mortgages.

The merger was made effective Wednesday and adds 3,000 newmembers and Frederica's two offices on St Simon's Island and inBrunswick. The combined CU has 23,000 members.

“The merger positions the combined organization to serve membersthroughout Southeast Alabama and South Georgia and provides anopportunity for expansion during what has been a difficulteconomy,” Steensma said in a formal statement.

Five Star is now working on integration of member accounts in aprocess that will continue into 2013, Steensma said. As a result ofthe merger, Five Star will have two additional branches in Georgiato go along with its existing network. Steensma expressed gratitudeto the NCUA for helping to speed the transaction.

He said Five Star received official notification of its winningbid on Feb. 7.