BROOK PARK, Ohio—Best Reward CU has acquired the troubled PEF FCU in Highland Heights, Ohio, the 11th credit union failure of the year..
NCUA took control of the $32-million PEF FCU June 21 after the credit union reported a $3.6-million loss for 2012 and a loss of $50,000 for the first quarter. Its net worth slid to just 4.3%. Today, NCUA reported it liquidated the credit union and that Best Reward immediately assumed certain PEF FCU members, shares, assets and liabilities.
The $100-million Best Reward had been retained by NCUA to manage PEF FCU during the brief conservatorship period, explained Michael Bell, partner with Howard & Howard in Detroit, who is representing Best Reward.
Bell acknowledged PEFFCU had issues within its lending portfolio, but said the bad assets will be retained by NCUA.
Both PEF FCU and Best Reward are community chartered and John Shirilla, CEO of Best Reward, said PEF FCU’s market footprint meshes well with the two-offices of Bewst Reward CU. "There is no overlap and the distribution of the offices is very good, a good spread within the local markets.”
Bell added that the purchase and assumption represents what he feels is a change in NCUA’s approach to assisted transactions, noting that in the past some credit unions have stated NCUA has been difficult to work with on such matters.
“I have worked with NCUA on many assisted transactions in the past, and I can tell you that things have changed,” said Bell. “On this acquisition, they were easy to work with, from the bidding process down to negotiating the agreement. It was a partnership. And the timing of this conservatorship was right. NCUA has listened to credit unions, said they want to get better at assisted transactions, and they have.”
