Content area
Full text
SAN DIMAS, Calif.-As its new name implied, Western Bridge Corporate FCU was designed to be a short-term bridge to something new-ideally, a new corporate capitalized by member credit unions-that was made up of something old-most of WesCorp's operations.
Other "bridge" corporates were doing the same thing: reorganizing and putting together capital plans that required natural-person credit unions to cut another check after having watched their Paid-In Capital vanish.
It would prove to be a bitter pill in parts of the country where corporates had failed and been placed into conservatorship, or had seen their capital significantly eroded. In most places, credit unions swallowed those pills. But not in San Dimas, Calif., where many believe Western Bridge's recapitalization effort was doomed from the start.
"You get burned like that, how can you go to your board and say 'let's get behind Western Bridge,'" observed Stuart Perlitsh, CEO of Glendale Area Schools FCU, summing up the view of many.
Perlitsh and a number of others say Western Bridge's poor financial performance (Credit Union Journal, Aug. 1, 2011) and its business plan to raise capital and create a new corporate called United Resources were just not enough to overcome the anger many felt toward the former Western Corporate FCU.
Greg Stockdale, CEO of the $35-million 1st Valley CU in San Bernardino, Calif., was on the Western Bridge advisory committee until early 2011. He said he initially planned to back Western Bridge despite WesCorp's serious stumble, until he saw the United Resources plan.
But others disagree and say other factors were at work.
'It Was Not Funny'
"They wanted so much in capital-2.5% to start-and then you had to hold 10 times that available. I said, to the advisory committee and anyone who would listen, 'That's absurd. No one will sign up for that.' Compared to what the other corporates were asking, that was so far out of market it was not funny."
Stockdale eventually guided his credit union to Corporate America in Birmingham, Ala., which was not asking for any capital. 1st Valley CU is now clearing items directly with the Federal Reserve.
As the plan was being put together to capitalize United Resources, Stockdale said he shared his concerns. "When I saw that plan I told...