New Corporate Combo Would Not Need More Capital
IRONDALE, Ala. – Members of Louisiana Corporate CU would not be required to acquire new capital after their corporate is merged into Corporate America CU, under preliminary plans for a merger of the two corporates.
Credit unions that currently are full members of LaCorp would be asked to convert their existing membership capital shares and paid-in capital to perpetual contributed capital, which will be required by the revised NCUA corporate regulation, Part 704. But no additional capital investment would be required from these members, according to the two corporates. Credit unions that are associate members of LaCorp could retain membership in the combined organization by purchasing PCC in a competitive contribution amount with a competitive yield.
The two corporates on Thursday announced their plans to combine and create a $3.9 billion entity, the third corporate merger announced in the past two months. The deal comes as members of Southwest Corporate (Bridge) FCU are voting on plans to merge into Georgia Corporate FCU, and Mid-Atlantic Corporate FCU is preparing to absorb Virginia Corporate FCU.
Corporate America and LaCorp currently are in the information gathering and due diligence phase, and both agree that the merger will proceed only if there is a sound business case for it. The corporates also have discussed the possible merger with their regulators and are staying in close contact with both the federal and state agencies.
Under the proposal, Louisiana member services and potentially CUSO operations will be housed in the corporate’s Metairie, La. facility. Corporate America’s President/CEO, Thomas Bonds, will serve as president/CEO of the combined organization. LaCorp’s staff will remain in place and continue to serve credit unions in Louisiana.
“We are very excited about this merger and believe it will benefit both Louisiana and Corporate America members,” said Bonds. “This business combination is a natural fit as our memberships are similar and our product and service offerings will benefit our combined membership going forward.”