At first glance, Louisiana Corporate CU's 2011 financial report shows an institution that increased total capital by $442,565 over the previous year, for a total of $8.9 million. However, the $218 million corporate will have to contend with $2.2 million worth of membership capital shares on notice.
Despite what that means–members are moving capital out of the institution–President/CEO David Savoie said he's happy with those figures.
"In Louisiana, until recently anyway, we've always had an environment where most of our members were dual members here and at Southwest," Savoie said, referring to the Plano, Texas-based Catalyst Corporate FCU. Southwest was originally chartered before Louisiana Corporate, he explained, so most of his members already had an account there before opening a second account at his Metairie, La.-based corporate.
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In fact, many LaCorp board members also had accounts at Southwest, he said, though volunteers used LaCorp as their primary corporate provider.
The $2.2 million worth of capital on notice represents 34 out of 200 members, Savoie said.
"So, we converted about 75% in dollars," he said, "and, considering we're $200 million and we're competing with Southwest, we like those numbers."
Catalyst Corporate has $2 billion in assets, which is 10 times the size of Louisiana Corporate.
Another positive takeaway from LaCorp's capital shares on notice is that the corporate actually has shares to return to members. During the corporate crisis, LaCorp didn't charge off one single dollar of MCS, Savoie said.
LaCorp exceeded its goal of converting $5.5 million worth of MCS to perpetual contributed capital by 120%, ending 2011 with $6.6 million worth of PCC.
CPA firm Carr, Riggs and Ingram, issued a clean opinion on Louisiana Corporate's 2011 year-end financials, which have yet to be presented to members at an annual meeting, because the event was deferred this year in anticipation of a pending merger with the $3.7 billion Corporate America CU. Net income after NCUA assessments showed an increase of more than 15% over the previous year. Deposits are right at $200 million, an increase of 35%. Members' shares also grew by 35%.
As the corporate nears the halfway mark in 2012, its migration from U.S. Central-based payment systems is nearly complete. LaCorp anticipates completing the conversion by late May, at which time it will have no remaining dependencies on U.S. Central for payment, credit or investment services.
LaCorp's planned merger with Corporate America has an effect on its financials. It exceeded its capital goals, but LaCorp doesn't want to raise more capital than needed in anticipation of the merger. The corporate is managing an influx of assets due to the current liquidity cycle by encouraging the use of SimpliCD and Federal Reserve excess balance accounts, both of which are off-balance-sheet products that hold total asset size down. Investments are more liquid than last year: as of 2011 year-end, LaCorp reported more than $40 million in cash, up from $9.4 million one year prior.
Daily shares ended 2011 at $175 million, up from $115 million as of Dec. 31, 2010. During the same period, share certificates decreased from $26 million to $17.6 million.
The LaCorp-Corporate America merger has received approval from the Louisiana Office of Financial Institutions, the Alabama Credit Union Administration, and the board of directors of both institutions; however, it is pending NCUA approval.
"I believe that Corporate America Credit Union is in capable hands with Dan Buckley acting as its interim CEO," Savoie said. "As Mr. Buckley has said, it's 'business as usual' at the Corporate, and this includes the merger plans between Louisiana Corporate and Corporate America."
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