Bigger Payout Puts WesCorp Deal for VolCorp Back on Track

NASHVILLE, Tenn. – WesCorp FCU’s proposed acquisition of Volunteer Corporate CU, delayed because of questions of state procedure, appears to be back on track with both corporates eyeing a wedding date for the first quarter of 2007. The proposed combination of the two corporates hit a roadblock in March when the Tennessee Department of Financial Institutions requested that VolCorp pay out more to members from reserves and undivided earnings than NCUA said it would allow. California-based WesCorp had proposed a $4 million payout to VolCorp members. To resolve the issue, WesCorp has agreed to pay out all of VolCorp’s $26 million in retained earnings to its members as Paid in Capital over a 20-year period. “What’s unique is that the payment of dividends will come from the savings of the merger,” Rick Veach, CEO of VolCorp, told The Credit Union Journal last week. The payouts are based on the length of membership and the amount of shares owned by each of VolCorp’s 230 credit union members. WesCorp has more than $27 billion in assets and VolCorp has more than $1 billion.