Deal Caps Corporate Merger Talk
As forecast in September-and months before that-the merger route for corporates is quickly coming home to roost with predictions that more plans might surface this month.
The latest last week centered on a key hurdle cleared by the $2.5 billion Georgia Corporate Federal Credit Union in its consolidation bid slated for completion next June or July of the NCUA-conserved Southwest Bridge Corporate of Plano, Texas.
In a vote taken by phone Nov. 30, members of an ad hoc, 140-member advisory council, put together by Southwest's interim management endorsed the consolidation plan for correspondent services to be handled under a merged Georgia-Southwest unit.
That plan won 86% approval of the 110 CUs participating in the poll and now must receive formal and final approval in the coming weeks from all 1,400 Southwest members council before it receives NCUA consideration, said Kerry Parker, chair of the council's 13-member executive committee.
NCUA officials have stressed that while it takes the suggestions of the ad hoc panels seriously, it will eventually decide on possible merger partners for Southwest.
"No action has been brought before NCUA" said John McKechnie, director of the NCUA's Office of Congressional and Public Affairs, noting the "council has no oversight authority over the bridge corporate-it is facilitating body that helps provides a forum for Southwest membership."
Parker, who also is president/CEO of A+ FCU of Austin, Texas, said the phone poll taken in a conference call is good news as the full council moves through a series of steps to bring about a merger that will affect the 1,400 Southwest members spread across the U.S. from Arkansas to Oregon.
As part of the Georgia Central package, said Parker, some Southwest members that are the most active users will have to pony up additional capital contributions, and on that, discussion will continue at a series of town hall meetings slated in the new year.
Meanwhile, the industry was abuzz about more corporate mergers in the offing as well as sometimes quiet moves by CUs to start finding new processing and funding providers, including regional Fed banks, while the corporate jockeying is sorted out.
That was the case in Minnesota last week where a group of 120 Midwest CU executives from the Minnesota Credit Union Network and the Credit Union Association of the Dakotas took part in a webcast and in-person corporate credit union forum, a first for these two leagues.
"Yes, I was very alone in discussing how we've made the switch to the Fed," said Rick Borchardt, CFO of the $180 million Lake State FCU of Moose Lake, Minn.
Borchardt, who said he has more work to do to complete the conversion to the Federal Reserve Bank of Minneapolis, noted that as a forum panelist he apparently was chosen to represent the Fed view. Borchardt's CU formerly was a Members United Corporate FCU user.
Like other leagues across the country holding town halls or corporate meetings, officials of the two Midwest leagues emphasized they hosted the sessions "to help credit unions navigate through the current corporate credit union environment" and not to espouse any set view.