PLANO, Texas – Catalyst Corporate FCU announced this morning plans to acquire Arizona’s troubled FirstCorp CU in a so-called purchase and assumption deal.
“The Board of Directors believes that this combination with Catalyst Corporate provides the best long-term value proposition for the members of FirstCorp,” said David Doss, chairman of the $1.1 billion corporate and president of Arizona State CU. “We have studied the Catalyst business plan closely, and we see a sustainable model that will allow our 48 members to continue to enjoy low-cost, comprehensive wholesale financial services well into the future.”
Today’s deal accelerates the consolidation of the corporate landscape, which saw Alloya Corporate FCU announce plans two weeks ago to combine with Michigan’s CenCorp CU. There have been six corporate mergers over the past year, as well. This deal will give Catalyst about $5 billion in assets and 1,000 members.
The latest merger is unique – taking the form of a purchase and assumption of certain FirstCorp assets and share accounts. Legacy assets will not be acquired by Catalyst Corporate, but will remain in the FirstCorp charter until they mature or until they are sold at a later date. “This approach protects FirstCorp’s membership capital, which will remain at FirstCorp, and also will immunize Catalyst’s members against risk of future losses on these assets,” said Kathy Garner, president of Catalyst.
The deal will follow Catalyst’s completion of the acquisition of the Western Bridge Corporate operations on July 1. FirstCorp’s Board of Directors has voted to have Catalyst Corporate take on processing of FirstCorp’s member ACH in advance of the full conversion. “This early conversion will ensure that all FirstCorp APEX-ACH users experience a seamless transition away from the U.S. Central Bridge Corporate platform before September 30, 2012, and will support FirstCorp’s commitment to ensuring that its members are not impacted by the 80% fee increase that takes effect in the interim,” said Greg Harden, interim CEO of FirstCorp.
