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NASHVILLE, Tenn. – VolCorp has sent all the documents related to its merger with WesCorp to the Tennessee Department of Financial Institutions – now it can only wait. Although there has been a change at the top at the Tennessee DFI with former Commissioner Kevin Lavender leaving to take a job with a bank, VolCorp President/CEO Bruce Fahnestock said he doesn’t expect that to delay the merger process. He noted that Greg Gonzalez, who previously served as general counsel and assistant commissioner of administration, is taking over as acting commissioner and he is very familiar with VolCorp. It’s been just over a month since the merger was announced, and Fahnestock said the response from VolCorp members so far has been good. “The biggest thing that they want to know is are they going to be dealing with the same staff they’ve always dealt with,” said Fahnestock. WesCorp has agreed to keep the 51 staffers in place as well as VolCorp’s headquarters, so VolCorp members should see no change in who they deal with. Fahnestock said WesCorp is not only committed to keeping the status quo, but trying to build business in the region. “I’m getting real positive feedback from the majority of our members. You always have a few that have a lot of questions, but that’s fine, we want to give them the full scope,” said Fahnestock. VolCorp has town meetings planned, but is waiting for state approval. Fahnestock said a few of VolCorp’s smaller members have expressed some concerns about falling off the map so to speak under a corporate as large as WesCorp. About 100 of VolCorp’s 230 members are under $100 million in assets. But Fahnestock points out that just under half (48%) of WesCorp’s members have below $50 million in assets, so it is not a corporate that is new to serving small CUs. One issue that is still up in the air is capital. There have been corporate credit union mergers that have fell apart over the question of distributing capital to the members of the merged credit union. Fahnestock said the board has identified the potential of returning capital, however it is too early to discuss with members because the regulators will have a big say in that as they ensure enough capital stays in placed based on the amount of assets moving to WesCorp. “This is something that NCUA and the state will have input in. Normally the capital does not move back to the member, it moves with the deposits. This is something the board has entertained, to at least give a portion of RUDE back to the members, but it is totally subject to regulatory approval,” said Fahnestock, who admitted he has been very cautious on this point with members because VolCorp doesn’t want to commit to something that the regulators have a lot of control over. Corporates are required to have at least 2% RUDE (reserves, undivided earnings). VolCorp has approximately 2.6% RUDE. Total capital, which includes membership capital, is approximately 7%. Tennessee Valley FCU CEO Blake Strickland, who serves as VolCorp’s chairman, said the board has come up with a tentative formula to determine what members would get back. “It’s based on years as members and your deposits. The ones who have been here the longest deserve it. They’re the ones who stayed and helped us build and grow,” said Strickland. Longevity of membership might mean a little more in VolCorp’s case than other corporates because it had to battle back from negative capital in the early `80s. WesCorp CFO Todd Lane said WesCorp is not involved at all in the capital issue, it is a decision for VolCorp to make. Lane said the regulators must ensure enough capital is carried over to meet the regulatory standard of 2% RUDE. But Lane also pointed out that regulators will likely look for a cushion – a number higher than 2%. When WesCorp merged with Hawaii-based PacCorp, PacCorp’s board decided to distribute a portion of its capital back to its members prior to the merger. As for WesCorp’s role in the merger process, it has begun putting together the merger plan that will ultimately be put before the NCUA Board for approval. The first step however is state approval in Tennessee. At press time, Fahnestock and six of VolCorp’s board members were set to embark on a three-day visit at WesCorp to see the corporate in action. “You want to see that the way you do things, the environment and the culture are similar. From everything I understand, they are, but one way to know is to see it yourself,” said Strickland. Strickland feels confident in the board’s decision to merge. “Everybody I’ve talked to is very realistic about this. They understand the economies of scale WesCorp is bringing. We’re just changing the sign hanging out front. We’ll still have the same folks they’ve always been dealing with.” [email protected]

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