Tuesday, October 15, 2024

The LGFCU Merger Proposal: Smoking Gun - Exhibit 1

 From: Maurice Smith

Meeting on Merger with SECU Jim Hayes - January 11, 2022

[Notes to LGFCU's Leadership Team]

Good morning, all,


Had breakfast with Jim Hayes this morning. Delightful conversation, though a bit more assertive than our earlier dialog. Here is the gist:


Jim made it clear that LGFCU on the other side of a core conversion is unworkable. The core providers are saying as much. They don’t want to build a system for SECU to make money serving what would have been core providers’ customers. Jim said the merger question needs to be answered before core providers give a proposal. I asked for the time frame… months not years.
 

Jim mentions twice wants Civic to remain separate and brand Civic along side all SECU branches. SECU will pour capital into Civic to scale it up to $1+ billion in assets. SECU will devote back-office resources to support CIVIC’s expansion. SECU will rebrand all ATMs as “SECU” and remove the “Cash Points” label. SECU will add Civic to the ATM network branding.
 

SECU will absorb all our staff at current salaries, perks, and benefits. SECU has 700 vacancies currently.
Jim asked about several of our executives and your roles with us…  

Jim said no less than 4 times that SECU already serves our members and have our members’ data.
 

Jim noted that “many” of our staff are applying for jobs at SECU now. I asked Jim about the other credit unions. Latino Credit Union is looking for a core and will be leaving SECU. Not sure about Greater Kinston and Press Association yet.


Jim is emphatic about retaining our staff. He believes our staff can help change his culture.
Jim asked about our “Presidents”. He feels he can find a role for them… just don’t know what yet.
 

Jim wants to meet with Jeanne and Ken [LGFCU board officers] before talking with the full Boards. It is his custom to frame up issues with the Chairs or Executive Committees before speaking with the rest of the Board. Jim was surprised that I had already mentioned this with the whole Boards. He notes if Ken and Jeanne shut him down, no need going to the rest of the Board. I will reach out to Ken and Jeanne to get their thoughts.

Jim asked me how I felt about this. I confessed I am struggling personally. LGFCU is not a bank model where we build a book of business to sell out later for a large payout. Merger feels like failure to me. 

Nevertheless, I will not let my personal feelings sabotage the Board’s responsibility of making the right call.
 

  Maurice

Maurice R Smith | CEO
Local Government Federal Credit Union



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