Sunshine State CU Members First in Florida to Vote to Convert to a Bank
Sunshine State CU became the latest credit union-and first in Florida-to make the jump to bank charter when members of the 52-year-old credit union voted on the final day of June to approve the switch.
Mark Lecain, president and CEO of the $183-million credit union, said the motive for the charter change was to enable the credit union to raise more capital to help finance growth, which was almost 20% last year.
"This will give us access to the capital markets," said LeCain, explaining plans to issue stock down the road.
The ballot garnered 62% by the voting members, but fewer than 20% of the credit union's 20,000 members bothered to vote. About 125 members showed up for a special meeting at the local Elks Lodge to hear the final vote count.
The ballot must still be approved by NCUA and the application must still pass muster from federal regulators at the Office of Thrift Supervision and the FDIC, which will provide deposit insurance for the mutual savings bank (thrift).
Under plans to establish a mutual holding company, member/depositors of the institution will retain control of the new thrift, to be known as Sunshine Savings Bank, according to LeCain.
Those plans call for the sale, through an initial public offering, of a minority stake, as much as 49%, of the institution. "It still is a member-owned institution as a mutual," said Lecain.
Credit union/bank officials hope to raise as much as $15 million through the offering, which cannot occur until at least a year after the credit union conversion, under Office of Thrift Supervision rules.
LeCain said he hopes to maintain continued relations with the credit union community and plans to continue using the Florida Credit Union League's service corp. for certain functions, including training and human resources. "We still have a good relationship with the league," he said.
Sunshine State Credit Union was originally chartered to serve state employees and was known as State Treasury State Employees Credit Union.
It has since expanded to serve multiple groups in the Tallahassee area.
The conversion is expected to be completed in October, according to LeCain.
The credit union is the 27th to convert to a mutual savings bank.
There are three others currently in the process including: Share Plus Credit Union, Plano, Texas ($175 million); Postal Community Credit Union, Boston ($125 million); and Lake Michigan Credit Union, Grand Rapids, Mich. $1 billion).