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News Now

Washington
Patelco assumes Cal State 9 Sterlent
ALEXANDRIA, Va. (7/2/08)—Cal State 9 CU and Sterlent CU, both California state-chartered institutions, were liquidated by the National Credit Union Administration (NCUA) yesterday. Patelco CU of San Francisco purchased assets and assumed most shares of both institutions. The NCUA, as conservator of Cal State 9, put the credit union up for bid in March hoping to negotiate a combination with another credit union. The Region V director said at the time that such a “purchase and assumption” arrangement represented the most financially sound decision for Cal Sate 9 and was in the best interest of its members. The $339 million-asset, Concord.-based Cal State 9 had been placed under the management of the NCUA in conservatorship in November 2007 after suffering setbacks linked to the sinking residential real estate market in the area. The Cal State 9 Credit Union liquidation and purchase and assumption by Patelco had been announced May 22, and was completed with the NCUA action Tuesday. In the case of Sterlent, the Pleasanton credit union reported a net loss of $5.5 million during the first quarter of 2008. Its credit quality issues stemmed from a home equity loan program it implemented in 2003. Its management ended the program in late 2006, according to a release issued by Patelco in May, when that credit union stepped in to help the $100 million-asset Sterlent. Patelco will continue operating branches of both purchased credit union, and member accounts in all involved credit unions are federally insured by the National Credit Union Share Insurance Fund (NCUSIF) up to at least $100,000. Patelco issued the following statement concerning their purchase and assumption arrangements: “We are thrilled to be able to continue providing for the financial needs of both credit unions’ members, and we are looking forward to the many opportunities we have to develop deeper ties in the communities they serve.”


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