PLANO, Texas, and ALEXANDRIA, Va. (12/15/11)--Catalyst Corporate FCU, Plano, Texas, has been awarded the exclusive right to acquire the assets of Western Bridge Corporate FCU, San Dimas, Calif., announced the National Credit Union Administration (NCUA) Wednesday.
"NCUA's Corporate System Resolution Plan took a huge step forward today," said NCUA Board Chairman Debbie Matz Wednesday. "Catalyst has a proven track record of integrating operations in prior acquisitions and employing sound business practices to maintain continuity of operations. We are confident that Catalyst will provide the same array of payments services presently provided by Western Bridge to its member consumer credit unions," she said.
As conservator of Western Bridge, NCUA sought an acquisition solution that would minimize service disruption to Western Bridge's member credit unions and ensure the best financial outcome for the Temporary Corporate Credit Union Stabilization Fund, the agency said.
NCUA conserved the former Western Corporate FCU in 2009 and created Western Bridge to ensure continuity of service and operations for member consumer credit unions. In 2011, Western Bridge members failed to capitalize a new corporate credit union, United Resources Corporate FCU. NCUA then conducted a competitive bidding process to identify a buyer for Western Bridge.
"We had partnered with Wescorp on a variety of projects over the years, and as a result we were already familiar with many of its systems and processes," said Brad Ganey, senior vice president/chief operating officer of Catalyst Corporate. "After performing due diligence, we feel confident that Catalyst can provide a compatible, cost effective option for Western Bridge members."
Ganey noted the corporates have operational similarities, shared platforms, and many of the same products, which will smooth the migration for credit unions moving from Western Bridge. All in all, he said, credit unions will experience minimal changes to the way they do business with their corporate: "Wescorp, and its successor Western Bridge, have offered members high value products and services for many years. We want to assure these credit unions that Catalyst will continue to provide everything they have come to expect, and perhaps even offer some enhancements."
Dianne Addington, Catalyst president/CEO, noted that "Catalyst not only offers every product and service provided by Western Bridge--we offer about a dozen more, "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.
"We are hopeful that many credit unions will be relieved as they learn more about our transition plans," she added.
Credit unions that committed to recapitalize Western Bridge as United Resources Corporate will face a capitalization requirement that is the same or lower. Credit unions on the sidelines can join with a maximum capital investment of 25 basis points, said Addington. Catalyst's capitalization methodology has dollar amount caps and a proportional scale-back feature for credit unions with under $50 million in assets.
The same rules for capitalization will apply to future members as those established for Catalyst's charter members. "Perpetual contributed capital is essential for Catalyst to be well-capitalized," she said. "Because we incur a degree of risk by offering our on-balance sheet services, any credit union that uses them must make a capital commitment. It's what's fair to the membership as a whole."
So far, Catalyst has nearly 900 capitalizing members who contributed $96 million to capitalize Catalyst, the result of a 2011 merger of Southwest Bridge FCU and Georgia Corporate FCU.
Existing member-owners will also benefit with the transition. "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," said Ganey.
In the coming weeks, Catalyst will contact prospective members as well as conduct a webinar this month and offer a special "Welcome Western Bridge Members" micro-site on the Catalyst website. Town Hall meetings will begin in January. The transition will be in full swing through mid-2012.
"We had an extremely smooth consolidation just a few months ago when Southwest Bridge Corporate and Georgia Corporate merged to become Catalyst, and we are more than ready to do it again," Addington said.