TAMPA, Fla. – The chief executives of Suncoast Schools FCU and GTE FCU yesterday rejected the notion the proposed merger between the state’s largest and fourth largest credit unions was forced by hard times experienced by the two, and insisted the two have flirted for some time.
"We first talked about this several years ago. Yes, we are facing a very challenging economic situation, and that situation has helped crystallize this concept for us. But this is something we would have considered in good times, as well," said Tom Dorety, president of $6 billion Suncoast, which lost $76.7 million for 2008.
"Tom and I have been very dear friends for a long time, and we have talked about this off and on for some time," Bucky Sebastian, president of GTE, which lost $27.5 million last year, told The Credit Union Journal yesterday.
The merger, which will be the biggest ever among credit unions, will create the nation’s fifth largest credit union, with about $8 billion in assets and almost 680,000 members. Though it hasn’t officially been decided which charter will be the one to continue on, Sebastian suggested it would be more cost-effective to put the vote to GTE’s 204,000 members, rather than Suncoast’s 475,000.
Dorety made a point of noting that credit union mergers have always been different from those of banks, particularly the "shotgun weddings" that have been in the news of late.
But the question remains whether GTE and Suncoast members will understand the difference when negative news about the financial system abounds. "Our merger is about delivering broader reach, broader access, and more convenience for our members, and it¹s also about better products and services, too," Dorety suggested. "It’s also about getting ready for the next big thing in the economy: the recovery."
"Believe we are closer to getting of this than most people think. [Southwest Florida] was the first in, and I believe we’ll be the first out, and a number of experts believe that, too. When that happens, this combined entity will be in a tremendous position to move forward and really do some good for our members."
The boards of both credit unions are doing their due diligence now, a process expected to take several months. Then the management teams will work on a business plan for combining the two institutions, at which time they’ll be ready to seek NCUA approval.
The hope would be to have all approvals in place by January 2010 and then take approximately a year to actually combine the two into one. As for who will lead the merged entity, the two CEOs said that is a decision for the newly-reconstituted board of the merged credit union, but both said they are comfortable enough with each other and with both of the boards that they can also both be comfortable with whatever that future new board decides.
