Credit Unions Attentive to Southeast Corporate’s Capital Plan

For More Information, Contact:
Margaret Blankers, MJB Public Relations Group
(866) 714-7041 •  margaret@mjbpr.com

TALLAHASSEE (Feb. 17, 2011) — Southeast Corporate Federal Credit Union wrapped up its seventh town hall meeting last week, with sessions held throughout Florida and Mississippi.  In all, some 200 executives and their board members were in attendance.

 “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.”

While Miller says he is pleased with the number of people attending and the positive feedback received so far, the Corporate wants to reach every one of its members. Over the next few weeks, staff will continue to share the details of its new business model and recapitalization plans through a number of 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,” he said.

During the sessions, Miller detailed how the economic events of the past three years affected corporates in general and Southeast Corporate in particular. He explained that, as with all corporates, Southeast Corporate was impacted by the losses at U.S. Central and it has experienced losses on its own portfolio as well. Nonetheless, Miller expressed confidence that Southeast is prepared to rebuild capital and gain strength over the next several years as he detailed the key elements of the Corporate’s 10-year business plan. “With our members’ support, we are moving forward,” he said.

 Southeast Corporate’s recapitalization plan calls for member credit unions to invest a total of $80 million in new Perpetual Contributed Capital (PCC). For each credit union, that equates to 45 basis points of average assets with a cap of $2 million. Concurrent with the capital raise, Southeast will be returning existing member capital shares (MCS) to members after the three-year notice period on MCS expires, less any additional impairments that are not covered by retained earnings in that time period. Based on loss projections from two outside analytic firms, it is expected that members will receive the majority of their existing $60 million in MCS back after the three year notice period.

During the town hall meetings, Miller outlined key components of Southeast Corporate’s new business plan, which 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. “We’re modifying Southeast’s business model to ensure we can continue providing the products and services credit unions need to compete in today’s marketplace, and that they receive the same high-quality member service and staff expertise they have come to expect from us.” Southeast Corporate is submitting its business and recapitalization plans to NCUA in March, and expects to launch its capital subscription campaign sometime in April.

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About Southeast Corporate Federal Credit Union

Southeast Corporate Federal Credit Union is a corporate credit union serving more than 400 credit unions throughout the southeast and nationally from offices in Tallahassee and Jacksonville. With assets of $2.9 billion, the Corporate was chartered in 1976. In addition to providing liquidity, investments, payment services and other back-office services, Southeast Corporate is the sole owner of Accolade Investment Advisory, LLC, which offers portfolio management and reporting solutions for credit unions. Southeast Corporate also is co-owner of two additional CUSOs, Member Business Solutions, LLC, which assists credit unions in serving the financial needs of small-business members; and Corporate Synergies, LLC, which is a core processing system and member interface. For more information about Southeast Corporate, visit www.secorp.org.

 

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