Rogue Federal Credit Union will expand its horizons Monday when it acquires Chetco Federal Credit Union's Oregon operations.
The National Credit Union Administration announced Friday that it had selected Medford-based Rogue Federal to purchase and assume Chetco's branches along the Southern Oregon coast.
In a release, the NCUA said it had placed Chetco into conservatorship on Sept. 23, 2011, "in order to protect the financial stability and safe-and-sound operations of the credit union."
The acquisition will add five branches and about $200 million in assets to Rogue Federal's operations, bringing its total assets to about $800 million.
Coast Central Credit Union has agreed to purchase and assume Chetco's Crescent City branch and California memberships.
The Chetco branches being added to Rogue Federal are in Harbor, Brookings, Port Orford, Gold Beach and Bandon. Gene Pelham, president and chief executive officer of Rogue Federal, said the credit union would keep all 67 jobs that come with those five branches when they are acquired Monday.
"That's a really important thing," said Pelham. "We'll be able to keep a credit union that was in Southern Oregon under Southern Oregon leadership ... and we'll be able to keep all those folks there."
The acquisition will increase Rogue Federal membership from 56,000 to nearly 70,000, and increase its overall number of employees to about 250. With the addition of the five Chetco offices, it will have 13 branches in six Southern Oregon counties. "It's a great thing for us to expand in Southern Oregon," said Pelham, who joined Rogue Federal in 2003 and became its fourth president and CEO in January 2007.
Pelham said Rogue Federal was notified in October that it had been selected to take on the coastal credit union and has worked to finalize the deal in the two months since.
Because of the nature of the "purchase and assume" deal, Rogue Federal was not obligated to take on all the outstanding Chetco loans. Pelham said of the $250 million in Chetco loans, Rogue Federal would take on about $160 million, the California credit union would take on a small portion, and the NCUA would liquidate the remainder.
"We were able to pick the pieces of the loans that made sense," Pelham said, "and put a package together that made the combined credit union — Rogue Federal — stronger."
Pelham said Chetco's loan portfolio was heavy on business loans, and when the economy stumbled the credit union suffered along with the businesses. The basic nature of the smaller communities on the coast also played a role in Chetco's difficulties, he said.
"Most financial institutions have been struggling in one way or another, and the South Coast was especially hard-hit," he said. "It's hard to run a financial institution in a limited population area like the South Coast."
Oregon Chetco branches will be closed for the holiday weekend and will open on Wednesday, Jan. 2, as Rogue Federal Credit Union.
Bob Hunter is editor of the Mail Tribune. Reach him at email@example.com.