“Very positive” – that is the progress report issued this week by Corporate One and Southeast Corporate regarding merging the 400 member Tallahassee-based corporate into the 775 member Columbus, Ohio-based corporate.
The deal was originally announced in September, shortly after Southeast revealed it had failed in its capital drive and would seek a merger partner.
The two now have concluded a series of eight town hall meetings – in Mississippi, Florida, and Alabama – that attracted around 100 credit union members of Southeast, said Paul Hixon, a Corporate One vice president. “We are now putting together a virtual town hall for those who could not attend, and that should be available for the remaining Southeast members early next week.”
The attendees heard the claim – made by Corporate One CEO Lee Butke and Southeast CEO Brad Miller – that the merged institution will be “the strongest corporate in the nation.”
Hixon elaborated: “We are projecting that at the time the merger closes, the combined entity will have a permanent leverage capital ratio at the 'well capitalized' level, which is 5%.”
Hixon added: “From a capital perspective, we're looking long-term and won't have to worry about raising additional capital in the future to meet the 2013 required levels. We'll hit those levels on day one.”
Present Southeast members are being asked for a capital call – the standard Corporate One capital commitment of .9% of assets, capped at $900,000 – but Hixon noted that Southeast members will get credit for their existing capital.
He added: “We are asking they convert their existing membership capital shares at Southeast to Perpetual Contributed Capital (PCC), and if they have less than the required .9% of total assets once they convert their existing capital, they will need to invest in additional capital until they reach the .9% capital level for Partner (full/capitalized) membership.”
As for how many Southeast members Corporate One hopes to convert, Hixon deferred to the desire expressed in the original merger announcement by Butke that Corporate One expected to retain “every one of them.”
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