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CU System
As expected Ga. Corporate board votes yes to merger
DULUTH, Ga. (9/1/11)--In the final milestone preceding the creation of Catalyst Corporate, the Georgia Corporate Board of Directors gave its formal assent Wednesday to a merger with Southwest Bridge Corporate. Earlier in the week, the transaction was approved by the National Credit Union Administration (NCUA) Board and the Southwest Bridge Corporate membership. That means Catalyst Corporate will be officially open beginning Tuesday. “Throughout this process the board has voted to approve planning components and significant actions, including approval of the merger application back in April,” said board Chairman Lin Hodges, president of Associated CU, Norcross, Ga. The vote "was a formality--but an important one for each of the directors as we contemplate how far we have come in the past year.” The board was "committed to ensuring that member interests are at the forefront of every decision,” said Hodges. “The strategy to consolidate with Southwest Bridge Corporate--a highly efficient and member-focused institution--in combination with tactics laid out in the Catalyst business plan, is the solution most capable of generating meaningful value to credit unions going forward.” Hodges, who will serve as the first Chairman of Catalyst Corporate, was a member of Georgia Corporate’s Advisory Committee--one of three member planning groups that considered more than a dozen business model options in depth during 2010 before selecting the present strategy. The others were a Strategic Steering Committee and Member Focus Group. “Member involvement throughout the planning process was essential, playing a critical role in bringing us to where we are today,” said Greg Moore, president/CEO of Georgia Corporate. More than 78% of Georgia Corporate’s previous shareholders subscribed to Catalyst, he said. “A good many credit unions want to continue to use the services of a corporate, but they have said loud and clear that they must reduce their exposure to risk,” said Dianne Addington, president/CEO of Southwest Bridge Corporate. “Catalyst Corporate represents this low-risk value proposition by minimizing the amount of capital a credit union puts at risk, and by minimizing the risk we take with those assets.” The new corporate's efficiency will ensure that Catalyst will "thrive financially, meet all of the capital and retained earnings objectives, and still take less balance sheet risk than what is possible under the old corporate model,” said Moore. "And we will achieve this without eliminating services or raising prices.” Together, the merging corporates have raised about $93 million in capital from 875 members, representing 74% of previous capital shareholders. “We do not doubt that, as soon as the merger is completed, other credit unions will seek to join Catalyst Corporate,” said Addington. The merger itself makes Southwest Bridge Corporate the first of its peers to come out of bridge status, well in advance of the two-year timeframe NCUA established last fall.


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