June 26, 2017


  • Building off the person who submitted the previous comment, I don’t know what is required to dissolve a credit union, but if I were a bank, I would offer credit union members 0.70 times book as the purchase price. This is a lot better than what they are getting now (nothing) and 30-50% cheaper than I can acquire a bank for. I would try to structure the deal as a deferred arrangement with a trailer, so if a member leaves before fulling vesting, they lose their equity claim. I have not seen this happen, yet, so it might be because the dissolution rules would not allow it. Just a crazy thought if I were thinking like an investment banker instead of a credit union manager.
  • Chip -- Great commentary! The merger game for credit unions is really a travesty for the membership of the acquired credit union. I don't know of any other industry where you can acquire the EARNING assets of another institution for free. At least with a bank transaction, the stockholders get paid something for their capital (book or a multiple thereof if high performing). It simply appears that credit union shareholders are treated as second-class citizens in the merger transaction -- get to the back of the bus. At a minimum, some portion of future earnings of the combined entity should be assigned "preferred shareholder" status so that a dividend can be paid to those members who contributed their capital and EARNING ASSETS to the acquiring entity with in exchange for zero economic consideration.
  • comments submitted to NCUA. CU members are waay to complacent, and very few understand the concepts discussed here. their membership, loan and deposit balances have measurable tangible value. No payments unless disclosed, an ombudsman should be appointed and paid for by the members to represent their interests in the proposed merger.
  • Here Here. Anyone who thinks management and boards are not being bought off has their head in the sand.