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CNBS Closes Second Ownership Offering, Adds Three New Owners

OVERLAND PARK, Kan. - Credit union broker dealer CNBS has announced that it has raised over $2 million in its latest ownership offering. The offering closed on Dec. 31. Three new credit unions came on as owners - People's Community FCU (Washington), Georgia Federal CU, and IH Mississippi Valley CU....

By Staff Writer | Updated on January 18, 2005

OVERLAND PARK, Kan. – Credit union broker dealer CNBS has announced that it has raised over $2 million in its latest ownership offering. The offering closed on Dec. 31. Three new credit unions came on as owners – People’s Community FCU (Washington), Georgia Federal CU, and IH Mississippi Valley CU. In addition, Louisiana Corporate and Arizona FCU increased their ownership stake in CNBS. It now has eight corporate CU owners and eight natural person CU owners. Hague said the new influx of capital will help CNBS be more aggressive in the inter-dealer market. “We’re now recognized on the Street as a name they can go to either to move bonds, or come to us looking for bonds. So this will help us be more of a presence in the market, and let’s us pass savings on to clients,” said Hague. From 2001-2003, CNBS experienced tremendous growth. The first quarter of’04 was also strong, but Hague said with liquidity drying up, things slowed down for CNBS. “We recognize we’re in a cyclical business. We continue to see pretty strong client growth in fee-based products. In terms of liquidity we’re in a down cycle.” CNBS did an offering early last year as well, which was predominantly done to give its corporate CU owners a chance to tender their ownership. Once U.S. Central and CNBS put an end to their non-compete agreement, it opened the doors for U.S. Central to offer broker dealer services through CUs via corporates, and CNBS to offer broker dealer services to corporates. At that time CNBS was completely owned by corporate credit unions, thus presenting a conflict of interest for those CNBS corporate CU owners that chose to offer their members broker dealer services via U.S.Central or for those corporate owners starting their own broker dealer CUSOs. During that offering, 10 corporates tendered their ownership. [email protected]

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