Southern Nevada credit unions hire temporary chiefs as boards weigh options


The top executive at a casino industry credit union and the chief executive at a church group credit union were replaced this week, leaving regulators and boards to resolve financial problems at the two institutions.

Andy Baumann, a former supervisor for the National Credit Union Administration, confirmed Friday that he was named to serve as interim CEO for WestStar Credit Union. The $174 million-asset financial institution calls itself "The Gaming Employees' Credit Union" and serves 30,000 members.

Baumann replaced Dan Paulson, who was chairman of the Nevada Credit Union League last year.

Separately, Paul Simons, chief executive officer of Credit Union 1, a Chicago area institution, said he will work temporarily as CEO of privately-insured Cumorah Credit Union.

Cumorah serves 12,000 members of The Church of Jesus Christ of Latter-day Saints and has $157 million in assets.

Simons said the Cumorah board asked him to serve as temporary CEO after conferring with American Share Insurance, the mutual insurance company that backs deposits at Cumorah and the Nevada Financial Institutions Division, which regulates state-chartered credit unions such as Cumorah.

Simons filled the vacancy left when Tony Mook, CEO for 19 years, resigned on Monday.

Simons continues as chief executive at Credit Union 1, but he said his credit union is not going to merge with Cumorah. Steele Hendrix, vice president of Cumorah, is in charge of day-to-day operations and reports to him, Simons said.

The Cumorah board, meanwhile, must weigh its options, which include hiring a permanent CEO or, alternatively, merging with another credit union, Simons said.

Deposits at Cumorah are backed by American Share Insurance, which is based in Ohio, while WestStar's deposits are federally insured.

"We feel very confident (about the future for Cumorah), and so does the (Nevada financial) commissioner," said American Share Chief Executive Dennis Adams.

Adams said the insurance company has the assets and liquidity to cover any possible losses at Cumorah.

"That's not a problem," Adams said, even though "real estate-secured lending has put some stress on the institution."

Cumorah's latest financial reports shows that 79 percent of its total loans were real estate loans and about half of the real estate loans were home mortgages.

The credit union lost $7.3 million in the first half of the year. Its net worth is 3.4 percent of total assets, which is low but well above the 0.4 percent at Ensign Federal Credit Union, another financially ailing institution that serves Mormons.

Simons has 35 years of experience and has dealt with problem institutions for American Share Insurance before, Adams said.

Baumann was reluctant to discuss his prior work but acknowledged that he was hired as temporary CEO at High Desert Federal Credit Union of Apple Valley, Calif., before it was merged into Alaska USA Federal Credit Union in August.

WestStar lost $3.5 million in the first half. Its net worth is 10 percent, making it well capitalized. Of its loans, 40 percent were for real estate.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

 

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