Merger of Meriwest, Golden Bay Yields 20% Growth

SAN JOSE, Calif. — Despite the impact of the housing market decline on Golden Bay Federal Credit Union, Meriwest Credit Union said it has successfully completed a data conversion with the Tucson, Ariz.-based financial institution.

Golden Bay’s contribution to Meriwest’s year-end performance was approximately 20% growth in assets, deposits, and loans, according to Meriwest. Golden Bay’s loan portfolio contained $26 million in subprime second mortgages which led Meriwest to increase its allowance for loan losses by $9.0 million in December resulting in a loss for 2007, as required under the pooling of interest method for accounting for mergers, Meriwest said. Offsetting this, however, was Golden Bay’s $16.6 million of capital adding a net increase of $7.3 million in retained earnings for Meriwest, nearly double the original plan.