DUBLIN, Ohio (10/28/09)--Credit Union 1's acquisition of Las Vegas-based Cumorah CU is positive because it joins two organizations that can benefit from each other, according to the CEO of Cumorah's private share insurer. Cumorah was closed Friday by state regulators and its assets and deposit shares were assumed by Credit Union 1, Rantoul, Ill. American Share Insurance (ASI), a private share insurance company in Ohio, is Cumorah’s liquidating agent. “I think [the merger] is a good move,” Dennis Adams, CEO of ASI, told News Now. “The right steps were taken to preserve the credit union movement in Nevada and to preserve member service [at the credit union].” The "marriage" between the two organizations will give the credit unions an opportunity to collaborate using each other’s strengths. For instance, while Credit Union 1 specializes in more traditional lending, like auto loans, Cumorah focuses on mortgages. The move will also help them diversify risk, Adams said. “They can play off each other in a positive way,” he added. Paul Simons, CEO of Credit Union 1, agreed that the acquisition was a good opportunity. “It’s a great way to diversify what we do in Illinois,” he told News Now. “There’s a lot of opportunity [for both credit unions].” Simons was appointed interim CEO at Cumorah before the announcement was made that the $574 million asset Credit Union 1 would take over Cumorah’s deposits and assets. He said Cumorah experienced delinquencies in its commercial real estate (CRE) loans. Cumorah is a very well-run credit union that had successfully done commercial real estate lending for years, Simons emphasized. But when the housing market collapsed in Nevada, the credit union suffered losses. On Monday, when local news outlets reported that Cumorah had been closed, members called staff at the credit union to find out what happened. Call volume and branch volume were higher that day, but by 11 a.m., all was “back to normal,” Simon said. “[The members] are fine.” It’s also important that the term “Cumorah” is kept in the credit union’s name. Cumorah is currently being referred to as a “division of Credit Union 1,” Simons said. One change that Cumorah members will see involves rate structures. Credit Union 1 members, regardless of their location, pay the same rates on products and services. Nevada’s rates are currently depressed because of a struggling state economy. When the rate pricing structure is adjusted at Cumorah to match Credit Union 1’s rates, Cumorah members will benefit, Simons said. Credit Union 1 doesn’t engage in business lending and doesn’t plan to in Nevada. It will stick to single-family mortgages and auto loans, Simons said. Several out-of-state credit union acquisitions have taken place recently--such as Alaska FCU’s acquisition of High Desert CU in Apple Valley, Calif. Simons said his credit union's acquisition of Cumorah occurred under unique circumstances. “I don’t see in the future that it will be prevalent,” Simons said. “It’s a window of opportunity that closes." Despite Cumorah’s failure, ASI’s Adams said its insurance funds remain strong. While any loss event will deplete reserves, ASI’s group equity ratio will remain in a “good range,” Adams said. As of June, ASI insured 157 credit unions in nine states: Ohio, Indiana, Illinois, Idaho, Nevada, California, Texas, Alabama and Maryland. The Credit Union 1 and Cumorah acquisition is ASI’s first. Cumorah is the third credit union in Las Vegas to fail this year and the first privately insured Nevada credit union to be closed since the nation's financial crisis began (Las Vegas Review Journal Oct. 24). Cumorah, with $147 million in assets and $129 million in deposits, has 60 employees, two offices in Las Vegas and two in Henderson (Las Vegas Sun Oct. 23). Credit Union 1 now has 29 branches--four in Nevada, 23 in Illinois, and two in Indiana.