Georgia Central Spells Out Details, Timetable for Southwest Merger
The $2.5 billion Georgia Corporate Federal Credit Union
wasted no time Friday in spelling out 2010 details and the timetable for its proposed merger of Texas-based Southwest Bridge Corporate FCU.
In a five-page report appearing on its website, Greg Moore, president/CEO, acknowledged again that NCUA remains the final arbiter over the disposition of the conserved Southwest and that the Duluth corporate "will need to address the economic value of the transaction which may transpire as a purchase and assumption rather than a traditional merger."
Still, Tuesday's formal approval by Southwest's 140-member Advisory Council, of a merger "strategy" for the Georgia/Southwest deal represents "an important milestone" on a planning process started a year ago. Apart from the NCUA ok, the proposal still faces approval by the 1,400 members of Southwest.
Writing under the corporate's "Due Diligence Corner" on the website, Moore said he was "cautiously optimistic that our plan will meet with NCUA's approval based on its abundant merits and potential goal" of minimizing disruption to CUs and the corporate system.
The report, which forecasts final completion of the merger by July 31 and operational consolidation in August or September ,contains requirements for new capital contributions by participating CUs.
On a tier basis, each member CU "will be asked to contribute a percentage of their assets--no more than 25 basis points" based on the tier they fall into noting that "in the past Georgia Corporate required 30-100 basis points."
Under the capital formula, there will be two new caps-- $600,000 for CUs between $240-$750 million and a cap of $750,000 for CUs above $750 million. Previously Georgia Central had no caps
The new corporate, said the report, "must require perpetual contributions in order to meet the NCUA's first capital target on Oct. 20, 2011."
Apart from the capital formula, the report lists the various submissions to NCUA over the coming months plus it cites plans town hall meetings in February-March to get feedback from Georgia CUs.