Nationwide Now On Bank Side

Members Of Credit Union Vote In Favor of Acquisition By Bank, Are Paid Premium On Deposits

Credit Union Journal   November 6, 2006
by Carol Anne Burger, Reporter

Members of the $567-million Nationwide Federal Credit Union have voted to merge their CU into the newly created Nationwide Bank.

"The board and I are very pleased that our membership has voted and agreed to this proposed merger," said CEO Paula Edwards, who issued a joint statement along with the NFCU board and Nationwide Bank. "All along it was most important that the decision to merge be in the hands of the people who own this credit union-our members. This path is in their interests. It is the right thing to do."

Carah Brody, a spokesperson for Nationwide Bank, which is owned by Nationwide Financial, in turn owned by the insurance company of the same name, said, " We're still awaiting some final regulatory approvals from NCUA. They need to verify the vote, and they have 10-calendar days to do that (until Nov. 10)."

Following the vote, the FDIC and the Office of Thrift Supervision must approve the deal, which is expected in mid-December. The transaction is expected to close in early 2007, said Brody. Following that, there will be a transition of all accounts to Nationwide Bank.

The direct merger provides for distribution of the CU's equity, or payment for members' ownership interest, plus a premium. NFCU's members will be paid $79 million for their ownership interests, distributed on a pro-rata basis according to their deposit balances as of the end of March 2006.

For a member with $10,000 in deposit balances - which include savings, checking, CDs, Money Markets, IRAs and Holiday accounts-the amount is $1,526.00. Of the 42,152 members eligible to vote, 16,718 cast ballots, with 14,872 voting in favor of the merger.

"From the very beginning, the NFCU Board and I took steps to ensure that this process was transparent, and that the focus was on the members' best interests. With the creation of Nationwide Bank, we wanted to forge a path that continued the credit union's high quality service, returned the members' equity plus a premium, and combined the best of both entities to make one, strong financial institution," said Edwards.

"I am proud of the interactive and ongoing dialogue we've had with our members over the past few months. I believe our forthright nature and open communications enabled NFCU members to understand the situation and why this merger was the best option," Edwards allowed.

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

Top of Page