Mid-Atlantic Corporate, VACORP to Pursue Merger
MIDDLETOWN, Pa., and LYNCHBURG, Va. (12/22/10)--In a move that could be considered taking their existing partnership to a new level, Mid-Atlantic Corporate FCU of Middletown, Pa., and VACORP FCU, of Lynchburg, Va., announced an agreement in principle to pursue a merger.
The management teams of both corporates will immediately begin preparing the merger documents required to be submitted to National Credit Union Administration (NCUA) for approval.
Mid-Atlantic Corporate currently partners with VACORP in providing several correspondent services to members, the corporates' release noted, and VACORP President/CEO Don Chapman said the Pennsylvania corporate has an excellent reputation as a progressive, financially sound corporate credit union.
Chapman reported that the merger announcement comes after "an extensive process of analysis and due diligence by senior management and the VACORP board."
He said VACORP was looking for a plan of action that provided continuity of service for its members. "It also was important to find a solution that expands the level of quality services and innovative products that VACORP members need to succeed in today's competitive marketplace. We believe this merger will accomplish that goal."
Last August, VACORP FCU announced it had ceased processing domestic wire transfers through U.S. Central Corporate FCU, had begun processing directly through the Federal Reserve Bank, and was planning to withdraw more services.
A letter to member credit unions at that time said the corporate would work with members to "transition them away from using U.S. Central's cash concentration and automated deposit transfer services" and actively pursue "alternatives to U.S. Central's securities safekeeping and international payment services."
"These actions, as well as others we will undertake in the future, will continue to ensure that VACORP and our members have viable, cost-effective alternatives to U.S. Central's products and services regardless of the final outcome of the (NCUA's) conservatorship of U.S. Central," the letter said.
The NCUA placed U.S Central into conservatorship in March 20, 2009, along with Western Corporate FCU, to conserve the credit unions' assets and to protect the National Credit Union Share Insurance Fund and the interests of the members.
VACORP plans to host a series of town-hall meetings throughout Virginia in January and February, with senior management from both corporates presenting details and answering questions. There are also plans for two webcasts for credit unions unable to attend any of the scheduled meetings.
Pending NCUA's approval of the merger, it is anticipated that VACORP members will be asked to approve the merger via mail ballot in March 2011.
~CUNA News Now - 12/22/10