Mid-Atlantic: VACORP Merger Necessitated by VACORP's Books
A merger with VACORP was not his first choice, said Mid-Atlantic Corporate FCU president/CEO Jay Murray in offering perspective on the announcement earlier this week that the two corporate credit unions planned to merge. But then it became obvious that Lynchburg, Va.-based VACORP would not be able to meet new, more stringent NCUA financial requirements.
"We started out trying to help VACORP get beyond issues that arose after the U.S. Central collapse," Murray said. "A merger was not our first choice."
As he looked at his credit union's books, however, VACORP president/CEO Don Chapman came to the conclusion that VACORP would have a very tough time meeting the new capitalization requirements. So he picked up the phone, called Murray ("We had been working closely together for several years--we knew each other well," Chapman said), and proposed a wedding.
When he saw that for VACORP there really was no better, obvious choice, Murray agreed to put the merger before his board which promptly gave its approval.
Both Murray and Chapman insist that they personally came up with the merger scenario, that there were no consultants or other backstage operators involved.
Chapman further notes that geography--the two credit unions are contiguous--played into the recognition that this pairing would benefit all involved.
The next step before the merger is final, Murray said, is for VACORP members to vote on it in March or April. Assuming they approve it, Murray believes all regulatory approvals could be had and the two credit unions will begin operating as one by late in the second quarter of 2011, possibly early in the third quarter.
"We anticipate no stumbling blocks. We believe this merger will be completed by mid-2011," he said.
The resulting corporate credit union will retain the name Mid-Atlantic Corporate Federal Credit Union, the headquarters will remain in Middletown, Pa., and Murray will continue as president/CEO.