The $3.4 billion Corporate America Credit Union and the $185 million Louisiana Corporate Credit Union announced late Monday they have called off their merger.
The two corporates decided to part ways rather than remain in “merger limbo,” as Corporate America Interim President/CEO Dan Buckley called it, waiting for NCUA approval.
“We began the merger process more than a year ago, and while it was approved by both boards of directors and state regulators, it has remained pending at NCUA,” said David Savoie, president/CEO of LaCorp in Metairie, La.
“We feel it’s time to move on with key initiatives at each of our organizations. For example, LaCorp independently has raised capital and eliminated all U.S. Central dependencies, while also making sure we continue to do a good job of serving our members,” Savoie said.
The NCUA did respond to a request for comment on Tuesday.
Buckley replaced former Corporate America CEO Thomas Bonds who quit July 3 after taking a leave of absence earlier in the year. Bonds and former NCUA Office of Corporate Credit Unions Director Scott Hunt had a documented feud that had apparently complicated and slowed the LaCorp merger.
The delay led Alabama Credit Union Administrator Larry Morgan to tell NCUA Chairman Debbie Matz in a November 2011 letter, “I do not believe Director Hunt can objectively act on any issue related to Corporate America ... It is our desire to respectfully request that the NCUA board direct agency management to allocate the requisite resources outside of Director Hunt’s control to conduct the merger review and forward a recommendation to the NCUA board."
Bonds also led a lawsuit against U.S. Central, claiming securities fraud in connection with the December 2008 conversion of $450 million in member capital shares into Tier 1 capital.
Buckley said Corporate America is focused on addressing the issues facing all corporates, such as full compliance with the revised corporate rules.
“Paramount for Corporate America is to ensure the strength, capabilities and staff skill sets needed to serve credit unions in a new regulatory era,” he said.
Buckley and Savoie said despite calling off the merger, the two corporates will continue to collaborate on various projects, as they have for many years. One project in process is enacting an agreement for LaCorp to partner with Corporate America for disaster recovery services.
“It makes sense to work with Corporate America for business recovery and continuity services,” Savoie said. “Our corporates have good proximity but are far enough away from each other to make it practical as a backup site.”
Corporate America is headquartered in Irondale, Ala., near Birmingham while LaCorp is located near New Orleans.
Like Savoie, Buckley said Corporate America appreciates ongoing opportunities to collaborate. “The member credit unions of LaCorp understand the value their corporate adds to their business,” he said. “At Corporate America, we also recognize the value of partnering with LaCorp by leveraging our collective strengths in the delivery of products and services to our member owners.”