Catalyst Chosen to Assume WesCorp Assets
December 15, 2011
December 15, 2011
The National Credit Union Administration (NCUA) has chosen Catalyst Corporate Federal Credit Union to assume the assets of Western Bridge Corporate Federal Credit Union, which was liquidated this fall after two years under regulator control.
“This is an excellent choice by NCUA and for the Western Bridge members and Catalyst Corporate members,” said Richard Hein, president and CEO of OSU Federal Credit Union and a member of the Catalyst board. “This decision provides a credit industry solution to address needs by credit unions of all sizes. Catalyst Corporate is uniquely positioned to partner in the transition of Western Bridge Corporate Federal Credit Union. Catalyst Corporate also has one of the lowest capital requirements in the industry. Both corporates have many things in common, from systems and services to partnering on several projects over the years. Catalyst Corporate offers all of the services Western Bridge Corporate is currently offering its members. In addition, Catalyst has an excellent track record of increased efficiencies through consolidating other corporates’ operations, which is one of the reasons Catalyst Corporate has obtained a leverage ratio of 5.01 percent, meeting the NCUA’s requirement for well-capitalized status well in advance of the deadline.”
The NCUA conserved the failed Western Corporate FCU, or WesCorp, in 2009, creating Western Bridge to avoid any disruption in service for member credit unions. Western Bridge members attempted to charter United Resources Corporate but were unable to raise enough capital, prompting the NCUA to begin a bidding process in September to find a suitable successor who could assume Western Bridge’s assets without disrupting service or inflicting significant costs.
“When we weighed the scales, it came down to which proposal was the best fit with minimal disruption to Western Bridge members and attractive for purposes of insurance fund,” said Scott Hunt, the NCUA’s corporate credit union office director.
This is not the first milestone for Catalyst this month. Within weeks of its creation through the merger of Georgia Corporate Federal Credit Union and Southwest Bridge Corporate Federal Credit Union, Catalyst had achieved “well-capitalized” status.
NCUA Board Chairman Debbie Matz also complimented Catalyst’s track record in the agency’s news release despite the corporate being just two months old. How is this possible? Hunt pointed out two contributing factors.
Catalyst easily beat the 2013 deadline to become “well capitalized,” having achieved that status within weeks of its creation through the merger of Georgia Corporate Federal Credit Union and Southwest Bridge Corporate Federal Credit Union. He also noted that the two corporates’ “well-proven” operating practices have remained intact throughout the conservatorship and merger.
Now, in addition to its strength in terms of safety and soundness, Catalyst is also poised to not only provide uninterrupted service, but to offer a number of upgrades and new products as well.
“Catalyst not only offers every product and service provided by Western Bridge—we offer about a dozen more,” said Dianne Addington, president/CEO of Catalyst. “Right out of the gate, credit unions will experience an improved value proposition—not just a replacement of their services. Credit unions deserve that after the challenges of recent years.”
Hunt also explained that he didn’t expect costs associated with capitalization to be a burden for credit unions.
“We believe the capitalization requirements for Western Bridge members to migrate into Catalyst will be seen as attractive,” he said. “Certainly no more expensive than was proposed for United Resources.”
Before the acquisition of Western Bridge, Catalyst reported 890 capitalized members “with more than $95 million in perpetual contributed capital.” Brad Ganey, Catalyst’s senior vice president and CEO, said that these existing members would benefit from the acquisition as well.
“With the increased efficiencies we will be able to achieve our income targets more rapidly, which means we can invest more heavily in new services and product enhancements that help our credit unions remain relevant to their own members,” Ganey said.
Catalyst has a series of communications planned to fully inform new members of the processes and benefits involved in transitioning to Catalyst, beginning with a webinar in December, a dedicated micro-site on the corporate’s website, and town hall meetings in January.
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