$130 Million Recap Is Catalyst For New Corporate
DULUTH, Ga. – Officials with Georgia Corporate FCU and Southwest Corporate FCU are soliciting their members for as much as $130 million in new capital to finance the combination of the two into a new corporate, Catalyst Corporate FCU.
The capital pledges would replace all of the capital erased by the failure of Southwest Corporate, a one-time $14 billion institution, and form the basis of a scaled-down corporate with as much as $3.4 billion in assets and with a national field of membership.
The capital call is one of several being staged among the corporates, who saw most of their capital wiped out by the failure of their own corporate, U.S. Central FCU, then troubled investments in mortgage-backed securities. Two other corporate failures, WesCorp FCU, to be known as Systems United FCU, and Members United Corporate FCU, to be Alloya Corporate FCU, also are staging road shows to raise new capital.
Amy Fuller, chief operating office for Georgia Corporate, said it has held 11 road shows in Georgia and the Southwest Corporate group has held 20 road shows as part of the capital raising. A full calculation of the capital commitments is not expected until later this summer. “Because credit unions have to take it to their boards,” Fuller told Credit Union Journal.
NCUA is expected to vote the corporate merger at its July meeting. A consolidation is planned by Aug. 1.