SAN JOSE, Calif. – Meriwest CU yesterday said expected losses on subprime auto loans by its recent merger mate, Golden Bay FCU, caused it to record a net loss for 2007. The amount of the loss was not disclosed.
While the Golden Bay merger added $16.6 million in capital, Meriwest said it was forced to set aside $9 million in loan loss reserves to prepare for losses on Golden Bay’s $26 million in subprime auto loans.
“During the later phase of the merger process, Golden Bay was affected by the rapid decline in the housing market which directly affected its sub prime portfolio.” stated Christopher Owen, president of Meriwest. “In assessing the stability and strength of Golden Bay going forward, Meriwest’s Board of Directors and its senior officers felt confident that this merger was a smart, strategic step for Meriwest.”
