TALLAHASSEE, Fla. and PLANO, Texas - There have been morecorporate credit union mergers announced in the past six monthsthan there have been in the past few years - merger mania is backin the corporate network. The latest to announce are the $10billion Southwest Corporate, Plano, Texas, and the $4 billionSoutheast Corporate, Tallahassee, Fla. This is the largestcorporate credit union merger ever, pairing the nation's secondlargest corporate with the fourth largest. Southwest has beenwithout a CEO since Francis Lee left to become CEO of U.S. Centrallast year. During its executive search, Southeast CEO Bill Birdwellwas approached by the recruitment firm about the Southwest job.Birdwell said he was perfectly happy at Southeast, but told therecruiter it was good timing for a merger. "I have been at a lot ofcorporates and I am very happy where I am. But I did tell them Ithink it makes good business sense if we consolidated," saidBirdwell. The merger wheels took off from there and the corporateboards began to explore the option. If the deal goes through, thenew corporate would retain the Southwest charter and be led byBirdwell, who would move from Florida to Texas. "For me it's goinghome. I have family there. I grew up in Texas. It's kind of likeputting on an old pair of shoes," said Birdwell. But to Birdwellthis merger is about the credit unions. "Scale in our business ishuge. What this will allow us to do is reduce cost and expandmarket share, which will translate into better pricing," saidBirdwell. He also noted that the each corporate has some productsthe other doesn't. For example Southwest has some extensive cardservices programs, Southeast doesn't. Southeast however offersmember business solutions through its Member Business ServicesCUSO; Southwest has yet to enter business services. Southwest alsohas significantly more expanded powers from NCUA, with Part I, II,IV and V powers, whereas Southeast has just applied for Part I.Interestingly, both corporates have item processing facilities inJacksonville, Florida. Southwest had an item processing presence inFlorida because prior to Birdwell joining Southeast, it did notoffer item processing services. Thus Southwest, although based inTexas, saw market opportunities in the Southeast. Birdwell quicklyadded item processing to the corporate's product menu when he wasnamed CEO of Southeast. Birdwell believes down the line the twofacilities can be combined into one, creating further savings - amove that makes more sense given the expected proliferation ofelectronic image exchange. "We're both on the same item processingsystem; it would be very easy to integrate," he said. Birdwell saidthis merger didn't just happen, some very careful, detailedfinancial analysis was done. "We used a scoring system that wasactually developed by Callahan & Associates, which we modifiedto fit the retail side. We found it would have a positive impact onoperations and create an organization that could significantlyimpact the credit union movement in general and the corporatenetwork in general," said Birdwell. Birdwell said members of bothcorporates can expect the same if not better service levels. "Wedon't see any degradation in service at all, we both focus onservice and have similar cultures in that regard." Birdwell saidpaying out capital is not in the merger plans. He said this is aconsolidation, not one corporate acquiring the other. "There aregoing to be significant benefits to the member credit unions.There's no reason to pay out capital," he said. He noted the strongcapital positions of each corporate, with Southwest at a 6.47%capital ratio and 2.9% retained earnings, and Southeast at 5.86%capital ratio and 2.91% retained earnings. Southwest CorporateInterim CEO Jody Beck called this merger a "natural fit" andexpects the economies of scale to help the new corporate servemembers. Greg Moore, CEO of Georgia Central CU, a corporate that isvery close with Southeast Corporate geographically andcooperatively, was surprised. "I didn't see this one coming, but itmakes sense. You have two strong corporates, strong financially andstrong from a staffing standpoint. Together they will create astronger more efficient corporate. I don't think it's a badthing-and I think in a way it may create strong opportunities forus because we have such a strong partnership with SoutheastCorporate," said Moore. Georgia Central and Southeast Corporate areco-owners in a data processing CUSO as well as a business servicesCUSO. They both run on an Open Solutions core system housed out ofa Southeast facility. The new corporate will likely not retaineither the Southwest or Southeast name. [email protected]