BIRMINGHAM, Ala.-Corporate America CU continues to move forward with its merger with Louisiana Corporate CU, with representatives of both corporates saying there is no basis for one report that NCUA has concerns over the deal.
Corporate America CEO Thomas Bonds said he still expects the merged entity to be fully operational by the end of Q1 2012, followed by a relatively smooth integration process, as both corproates run the same operating system. The merged institution expects to serve between 750 and 1,000 natural-person CUs. Currently Corporate America serves more than 500 natural-person CUs in 38 states.
Corporate America's current capital ratio stands at 4.6%, said Bonds, touting the fact that 100% of the capital raised was voluntary. It currently has two capital offerings open and he said the corporate planned to keep them open.
Bonds said CACU plans to maintain a "fair fee schedule. What I don't want to see happen is corporate credit unions march in lock-step on increasing fees, because that's simply transferring retained earnings from natural-person credit unions" to corporates, which "doesn't do anything for the capital system as a whole."
One source had told Credit Union Journal that NCUA's concerns lie with the combined entity, and not with either Corporate America or Louisiana Corporate.
"They're supposed to come back on-site in January, and as far as they're communicating to me, they are evaluating it," said Bonds. "One of the things they wanted us to do was document some policies and procedures and dot some i's and cross some t's a little better, but they haven't communicated to me that they are going to" put the kibosh on the merger.
David Savoie, CEO of Lousiana Corporate, echoed that. "I've had conversations with NCUA as recently as today and I haven't heard any reservations about the merger based on any safety and soundness concerns. If you look on the face of it and compare the size of our institution and the size of theirs, how could the combination of an entity about one-tenth of their size create an entity that suddenly would have a safety and soundness concern? That rumor doesn't make any logical sense to me."
NCUA Spokesman David Small said only that the merger "remains under deliberation" and that "no action has been taken."
Article reprinted from Credit Union Journal, Monday, November 14, 2011; By: Editorial Staff