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New Catalyst Corporate counts 866 members so far
DULUTH, Ga. (8/10/11)--More milestones in the plan to launch Catalyst Corporate have been reached. It now has 866 members, and last month, Georgia Corporate FCU and Southwest Bridge Corporate FCU transferred members’ pledged Perpetual Contributed Capital (PCC) into escrow --signaling confidence that the business plan laid out earlier this year will succeed. The joint strategic plan, presented to member credit unions in March, stated that as soon as sufficient capital subscriptions were obtained, pledged funds would be moved into an escrow account at U.S. Central Bridge FCU to prepare for the eventual transfer of the funds to PCC on the date of the merger. “Together we have raised $91.3 million in PCC,” said Greg Moore, president/CEO of Georgia Corporate. “And perhaps more importantly--these capital pledges represent more than 865 subscribing members.” To date, about 74% of the previous capital shareholders of the two corporates are on board as capitalizing members of Catalyst Corporate. “The fact that so many credit unions, after completing months of due diligence, chose to partner with Catalyst Corporate through capitalization speaks volumes about the value we can achieve,” said Southwest Bridge Corporate President/CEO Dianne Addington. Moore agrees: “Credit unions have confirmed that they believe in a cooperative model, and that they appreciate the importance of scale when choosing a corporate,” he said. He noted the operating efficiencies presented by their model “make a difference that goes beyond better pricing. It means that we won’t have to rely on our balance sheet, and that means less risk.” Credit unions have made it known that they want to continue to use the services of a corporate, but to reduce their exposure to risk. The corporate will minimize the amount of capital a credit union puts at risk, and minimize “the risk we take with those assets,” Addington said. She pointed out that Catalyst Corporate’s model balance sheet is more conservative than what is required by new regulation 704. Plans for the operational merger also are underway and going smoothly, Moore said. “Our members have given us positive feedback as we have introduced them to the new system and enhancements to products and services that will result from the consolidation,” he said. “In particular, they are pleased that their lines of credit will remain intact--a key concern for many credit unions that are capitalizing Catalyst.” The National Credit Union Administration is expected to approve the merger application this month, with the consolidation taking place on Sept. 6.


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