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CUs reviewing Southeast Corporates capital plan
TALLAHASSEE, Fla. (2/23/11)--Southeast Corporate FCU has wrapped up its seventh town hall meeting last week, where it outlined its recapitalization plan for member credit unions. About 200 executives and their board members attended the meetings throughout Florida and Mississippi. "Members were fully engaged and asked good questions," said Brad Miller, president/CEO of the $2.9 billion corporate. "It's clear they are doing their due diligence, and weighing all their options inside and outside the corporate system. Our goal is to provide our members with the information they need to make a sound business decision for their credit union." Over the next few weeks, staff will continue to share details of the corporate's new business model and recapitalization plans through credit union meetings, including board presentations, chapter meetings and other opportunities. "It's really important to us that we talk with as many members as possible," Miller said. Southeast Corporate's recapitalization plan calls for member credit unions to invest a combined $80 million in new Perpetual Contributed Capital (PPC). For each credit union, that equates to 45 basis points of average assets, capping at $2 million. Concurrent with the capital raise, Southeast also will return existing member capital shares (MCS) to members after the three-year notice period on MCS expires--less any additional impairments not covered by retained earnings during that period. Based on loss projections from two outside analytic firms, Southeast Corporate expects members will receive back most of their existing $60 million in MCS after the three-year notice period. At the town hall meetings, Miller outlined key components of the corporate's new business plan. They include: increasing efficiencies, ensuring continuity of services for members, protecting and preserving member capital and developing a business model that provides members with sustainable value. "As part of the plan for moving forward and rebuilding a strong and viable corporate, we are asking members to contribute new capital as we feel having an ownership stake in your corporate is fundamental to our cooperative system and makes sure all members are treated fairly," Miller said. Southeast Corporate will submit its business and recapitalization plans to the National Credit Union Administration in March. The corporate expects to launch its capital subscription campaign sometime in April.
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