CU Conversion As A Retirement Plan

Credit Union Times   April 14, 2006

CHULA VISTA, Calif. (04/14/06) – Directors thinking of converting their credit union to a bank as a retirement nest egg will want to look at three retirees of Rohr Corp., who took the company's former credit union, known as Pacific Trust FCU, public after converting it to a mutual savings bank. Since shedding its credit union charter in January 2000, then launching an IPO 16 months later, the ex-credit union now known as Pacific Trust Bank has tripled both its size to $750 million and its share price to almost $30, and created millions of dollars in benefits for its former volunteer directors. As a result, each of the three Rohr retirees--former Chairman Alvin Majors, Donald Purdy and Francis Burke, and a fourth, ex-credit union director, Kenneth Scholz--have earned $1 million on the 50,000 shares they bought in the May 2002 IPO, according to documents filed with the Securities and Exchange Commission. Each has also been granted stock options worth another $300,000. That's on top of the $10,000 annual board fees paid to the ex-volunteer credit union directors. Each of the four now owns Pacific Trust Bank stock worth $2 million. Benefitting the most from the conversion was Hanz Ganz, president and CEO of the credit union-convert. Ganz has also earned $1 million from the 50,000 shares he bought in the IPO, but has also been granted 55,000 restricted shares worth $1.6 million; 23,707 shares for employee stock ownership plan worth $700,000, and 134,500 options valued at $1.5 million. That's not counting $1.6 million in cash compensation he was paid since the 2001 switch to bank. The 181,324 shares and 134,500 options Ganz owns give him a stake in the former credit union valued at almost $10 million.

© 2007, Used with permission from The Credit Union Journal. All rights reserved.