Immediately after Louisiana Corporate Credit Union announced its intention to explore a merger with Corporate America Credit Union, CU Times Correspondent Robert McGarvey got Louisiana Corporate's CEO David Savoie on the phone for a candid conversation about his role in the merged corporate, which will be based in Alabama under the leadership of Corporate America's CEO Thomas Bonds, if the merger, in fact, occurs. Savoie also discussed the future of corporates in general. Excerpts from that conversation:
To be honest, I don't know what my role will be. When we got serious in our talks about a merger, I wanted to put the interests of our members first. Not my interests. Too often it seems as though executives put their interests first in a merger, doesn't it? We reversed that. I believe I will have some role, staying in the Metairie office, but there is time to work out those details.
We first started talking about a merger in 2006. We both serve many small- and medium-sized credit unions. Our two corporates have much in common. Our letter of intent [to merge] runs through June 30. I would expect we will have this wrapped up early in the second quarter.
But change is always slower in this industry than expected.
We do not need to merge. We are in a good capital position. We do not need additional capital from members. From a financial standpoint we are in good shape. We are looking at a merger so we can offer more services. We are looking at what is best for our members.
Fundamentally, I believe we need strong corporates. I was taught that the reason corporates exist is to provide a source of liquidity to credit unions. Correspondent services can come from elsewhere. But there is no substitute for corporates when it comes to sources of credit for credit unions. I feel very strongly about this. Banks do credit lines different than corporates do. They will be quicker to cut your credit off.
After this merger, we will be able to handle the credit needs of any credit union.
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