PLANO, Texas-Catalyst Corporate FCU, the corporate credit union conglomerate constructed from four corporates-three of them failures-has disclosed some of the details of last year's purchase and assumption of the remnants of WesCorp FCU, the one-time $34-billion California failure.
Catalyst, the former Southwest Corporate FCU that has also acquired Arizona's FirstCorp CU and Georgia Corporate FCU, disclosed in its annual report that it made an initial payment to NCUA of $2.5 million upon the completion of the P&A for the remnants of WesCorp. As part of the deal, Catalyst has recognized a contingent liability of $1.55 million, which will be paid over a five-year period and is based on the capitalization level and related fee income of original WesCorp members.
Southwest and WesCorp were among the five big corporate failures taken over and liquidated by NCUA, while FirstCorp was troubled by the same investments in mortgage-backed securities.
The disclosures come as more details of the growing number of corporate mergers are becoming public. Recently, for instance, Columbus, Ohio-based Corporate One FCU disclosed that it received $15 million in NCUA assistance to facilitate the merger of troubled Southeast Corporate FCU, Tallahassee, Fla.
There have been 10 corporate mergers since the implosion of the corporate network culminating in the 2009 failures of WesCorp and U.S. Central FCU, but NCUA has refused all requests from Credit Union Journal for additional details on corporate mergers and NCUA assistance.
As part of the WesCorp deal, Catalyst said it picked up about 290 new members and some $50 million in new capital.
In August, 2012, Catalyst acquired the remnants of Arizona's FirstCorp CU, a $1.1-billion credit union with 48 members. A bargain gain of $52,000 was recognized related to the purchase and assumption of FirstCorp. Catalyst Corporate did not purchase FirstCorp's capital, legacy investments or undivided earnings.
