Taking on the deeply troubled $330 million Paragon FCU, New York's Visions FCU expects to draw on its own successful merger record in helping to turn around the Montvale, N.J., credit union while Visions adds new business, its president/CEO, Frank E. Berrish, said Monday.
The $2.6 billion Visions of Endicott, N.Y., plans to complete on Nov. 1 a merger of Paragon, which has long been on an NCUA watch list and pushed by the agency to find a merger partner.
“The prospects of a merger began last April when there were some 40 credit unions given an RFP,” Berrish said of the standard bidding procedure initiated by Paragon lawyers.
Paragon, which lost $8 million in 2010, had 3.18% net worth and held a CAMEL 4 or 5 rating, had been hurt by real estate-related losses, forcing it to sell its own headquarters building in a buyback deal. In the first half, Paragon lost $489,000.
“The real estate market turned very negative for the credit union worsening its problems,” said Berrish.
In expanding for the first time in the northern New Jersey suburbs of New York City, Visions, a former IBM CU located in the central part of the state, said it seeks to find new loan business out of its own market “described as heavy with savers and in an area losing families.”
The chance to expand into New Jersey permits Visions “to reach out to a more youthful demographic,” Berrish said.
“We believe the business there is more robust,” he said. A year ago Visions completed a merger of the $2 million Progressive Neighborhood CU of Rochester “and today we've seen that number climb to $24 million,” Berrish said, as the result of providing new products and services to the Progressive membership.
The Paragon deal will add six branches, giving Visions a total of 29 in New York, New Jersey and Pennsylvania, with more than 166,000 members.
The president/CEO of Paragon, John S. Fiore, would be leaving the CU next January under the transition schedule, said Berrish. He said he could not comment on any change in staff levels “as we complete our due diligence procedures.”
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