Fallout Includes Merger Talk
The industry wrangling over how to deal with the fallout from corporate restructuring and options on provider servicing continued last week, with at least one fresh discussion of merger negotiations.
In the case of the conserved Southwest Corporate FCU, there was mention by the $2.3 billion Georgia Central CU of Duluth of consolidation talks.
The citation arose in Georgia Central's internal newsletter for October, in which President/CEO Greg Moore hinted at behind-the-scenes discussions with an unnamed corporate that was seized by the NCUA on Sept. 24. The mention appeared in Moore's "Corporate Ink" bulletin under "President's Perspective."
"It is known to many" he wrote, that the future business model chosen for Georgia Central by its planning groups "requires consolidation."
"It is further known that the optimal solution selected by our planning groups involves consolidation with another very large corporate credit union that has the infrastructure and scale to create significant efficiencies," he continued.
And it's probably "suspected," he went on, that the corporate CU was conserved in September.
"If so, you're right," suggests Moore. The CEO was not immediately available to elaborate on his comments, and an NCUA spokesman said the agency had received no merger application.
Southwest Corporate along with Members United Corporate FCU, Warrenville, Ill., were the two conserved corporates on Sept. 24 along with Constitution Corporate FCU of Connecticut.
"What I want to convey to Georgia Central's members first is that these developments do not impede our momentum for pursuing our chosen strategy," Moore wrote. "With the establishment of bridge corporates to house good assets and the payments infrastructure for as long as 24 months, NCUA flexibility about how credit unions can choose to make the post conservatorship future, there continues to be ample opportunity for Georgia Central to affect a consolidation" that will prove robust and productive, he said.
Meanwhile, the California and Nevada Credit Union Leagues said that based on heightened interest in the future of corporates, specifically the conserved WesCorp of Los Angeles, it has added several new members from outside of California and Nevada to its corporate task force, formed just after Sept. 24, to consider provider options. The league said it has expanded its reach to cover several Mountain States, including Idaho, Utah and Washington State, with CEOs from large CUs on the panel.
Elsewhere, the Texas Credit Union League, which is helping the NCUA and the new interim management of the Southwest bridge corporate recruit members for its advisory panel, said an executive committee would likely be set up soon to get answers on the makeup of the future Southwest entity. The executive committee, as proposed, would have 12 members. More than 140 volunteers and CEOs signed up to become members of the panel with states across the South and Southwest represented.