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Southeast Corp. announces new biz capital plan
TALLAHASSEE, Fla. (12/10/10)--The board of directors of Southeast Corporate FCU has approved a new business plan for serving its membership of about 400 credit unions. The plan includes a recapitalization effort focused on continuity of services, preservation and protection of member capital, long-term sustainable value to members, and compliance with the new National Credit Union Administration Part 704 requirements for corporates as they take effect the next few years. “We have begun holding webinars with our members this month and will schedule town hall meetings in early 2011,” said Brad Miller, president/CEO of Southeast Corporate. “These discussions will provide an opportunity to lay out plans and obtain members’ input for Southeast’s next steps.” The plan calls for continuing to work with other corporates and industry partners to consolidate back-office operations and processes to lower costs, increase efficiencies, and provide best-of-breed products and services, Miller said. It also includes moving from a current 64% operating coverage ratio--non-interest income as a percent of operating costs--to 90% within three years. “This greatly reduces our reliance on investment income and means less risk to member capital,” he added. Within one year, Southeast Corporate intends to reduce the size of its balance sheet by about $1 billion and raise $80 million in new Perpetual Contributed Capital to support a $2 billion balance sheet. The intent is to build member value while continuing to provide needed payments, settlement, and liquidity services to members. The corporate plans further operating expense reductions and scale efficiencies through partnering arrangements that further aggregate payment volumes. Also, Southeast Corporate plans to recapture 20% of the balances that leave the balance sheet in existing and new off-balance-sheet products that generate fee income. Existing Member Capital Shares will be returned to members at the end of the three-year notice period, less any additional Other Than Temporary Impairments not covered by retained earnings that the corporate may need to take during this time period. “We’re confident this plan will allow Southeast Corporate to continue providing member-owners with the high-quality and competitively priced products and services they have relied on from us for over the past three decades,” Miller said “We’re eager to hear from members. One thing is clear: Our strength and future ability to meet their needs depends on their support.”


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