ST. LOUIS – While compelling to some Nebraska CU CEOs, it doesn’t look like a proposal to create a Midwest regional corporate is going to deter Nebraska CUs from approving the Nebraska Corporate Central FCU/SunCorp Corporate Credit Union merger. As reported in Credit Union Times (CU Times, June 26), Missouri Corporate FCU President/CEO Dennis DeGroodt sent out a letter to the CEOs of six corporates – Kansas Corporate CU, Nebraska Corporate Central FCU, Iowa League Corporate Central CU, Minnesota Corporate FCU, Midwest Corporate FCU and Treasure State Corporate CU – inviting them to attend a meeting in July or August to explore the concept of merging all of their corporates to create one large regional Midwest Corporate CU, which would command about $3.6 billion in assets. DeGroodt sent out another letter to the CEOs of Nebraska CUs to ask them to consider the regional corporate possibility before voting on the proposed SunCorp/Nebraska Corporate Central FCU merger. DeGroodt’s hope is that the concept will be so enticing to Nebraska CUs that they’ll vote against the merger in order for Nebraska Corporate Central FCU to become part of the regional corporate. Is there even a chance this could happen? Credit Union Times spoke with many Nebraska CU CEOs to find out. All interested, say `I’ “I say why go and try to reinvent the wheel when we got what we needed from SunCorp. I strongly support the merger,” said Jim Guretzky, president/CEO of SAC FCU, Omaha. Guretzy is a former long-time board member and chairman of Nebraska Corporate. One benefit DeGroodt touts of the proposed regional corporate is that each state would have guaranteed board seats, whereas if a large corporate from some other part of the country swallows up a Midwest corporate, their board position could be short-lived says DeGroodt. DeGroodt also says that Midwest corporates and CUs have similar philosophies and needs and a Midwest regional corporate built from the ground up could cater to those differences. “In the letter Missouri talks about guaranteed board seats, guaranteed representation for each state. You can’t really do that in any situation. All it takes is for the membership to vote or board to vote to change the bylaw. There’s no such thing as a guarantee in that situation,” said Guretzky. Guretzky, who is obviously for the merger, said it would take too long and be too expensive to create a Midwest regional corporate, and that SunCorp, Arvada, Colo., isn’t exactly a West Coast corporate. He said Missouri Corporate might want to evaluate its own merger options. “Missouri isn’t in the mix right now. Maybe they need to think about merging with SunCorp also and then you’d have even more of a Midwest corporate. I do anticipate additional mergers, this is a volume business,” said Guretzky. 1st Choice CU, Lincoln, Neb., President/CEO Dale Springer said he’s in favor of the deal that’s already been decided. “I have trust in my corporate board. We’re very supportive of Nebraska Corporate’s previous action with SunCorp,” said Springer. But not all Nebraska CU CEOs were as cut and dry as Springer and Guretzky. “Well you know it’s nice to have options. It’s interesting that he (DeGroodt) wants to do this, but he’s going to have to do this real fast,” said Elaine Mausbach, president/CEO of Metro Health Services FCU, Omaha. Mausbach said she won’t let emotions get in her way in any decisions about a corporate merger or regional corporate deal. “You try to stay away from the politics and do what’s best for your own members. If he (DeGroodt) moves fast enough and comes up with better products and services then we’ll look at it, though there’s a slim chance that will happen before the day the SunCorp merger is voted on,” said Mausbach. Actually according to Nebraska Corporate Central FCU the merger vote may not take place until September given that the NCUA Board doesn’t meet in August. Mausbach said CUs are really in the driver’s seat these days because they can belong to just about any corporate CU located any where in the country. She said even if the Nebraska Corporate Central FCU/SunCorp merger goes through, that wouldn’t stop her CU’s board from looking at the possibility of joining a Midwest regional corporate if it was created minus Nebraska Corporate. “We can join any corporate in the U.S. We’re pretty much assured we’re going to get services,” she said. Creighton FCU, Omaha, President/CEO Tom Kjar, who is a member of the Nebraska Corporate supervisory committee, qualified his remarks by saying he wasn’t speaking for the supervisory committee or the board, but as a Nebraska CU CEO. “I believe you have to look at all your options. I don’t know if the Midwest idea will be any better or worse, but I think it’s prudent to look at all your options,” said Kjar, who noted that one thing no Nebraska CU CEO is going to argue about is the need for Nebraska Corporate to merge with somebody to get the economies of scale to deliver better rates. Bob Torell, president/CEO of University of Nebraska FCU, Lincoln, said a merger for Nebraska Corporate is long over due. He said it provides great service, but its rates can’t compare with the larger corporates. “We went out and joined SunCorp a year ago. We use them primarily for investment services. Their rates are good, service is excellent. We still settle with Nebraska. I see no reason not to support the merger,” said Torell. Torell said if some corporates could make a Midwest regional corporate a reality that’s fine, but he doesn’t think it should slow down the SunCorp/Nebraska Corporate merger. Ken Bradshaw, president/CEO of Burlington CU, Lincoln, said he doesn’t think Nebraska Corporate would gain anything more from merging with six other corporates to form a large regional corporate than it would from merging with SunCorp. He noted that the asset sizes would be very comparable, so what’s the advantage? “I don’t have any problem with what they’re trying to do. I think it’s too little too late. I have a high comfort level with what they (Nebraska Corporate’s board) did. They had to do something. Their size caused them to have an inability to offer competitive rates,” said Bradshaw. “We were reaching the point where we were going to look at other corporates to improve our return.” There will be some Nebraska CUs that aren’t too interested in either deal. Don Mahan, president/CEO of Centris FCU, Omaha, said he hasn’t spent a lot of time looking at either opportunity because his CU doesn’t rely on Nebraska Corporate for many things. “I think both opportunities need to be looked at because Nebraska Corporate can not stand on its own. I don’t have strong feelings either way because we don’t use our corporate very much. We rely on NAFCU’s NIFCU$ program and we haven’t had to borrow for quite a while either,” said Mahan. Mahan said whatever shakes out, as a CEO he’s going to do what’s best for his members, and that is find the best return. [email protected]

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