The following presentation was presented to the board of Motorola Employees Credit Union in May, 2011. I am sharing it with the community to assist others in their efforts to educate their boards concerning the formation of Alloya Corporate FCU as part - PowerPoint PPT Presentation

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The following presentation was presented to the board of Motorola Employees Credit Union in May, 2011. I am sharing it with the community to assist others in their efforts to educate their boards concerning the formation of Alloya Corporate FCU as part

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Title: The following presentation was presented to the board of Motorola Employees Credit Union in May, 2011. I am sharing it with the community to assist others in their efforts to educate their boards concerning the formation of Alloya Corporate FCU as part


1
The following presentation was presented to the
board of Motorola Employees Credit Union in May,
2011. I am sharing it with the community to
assist others in their efforts to educate their
boards concerning the formation of Alloya
Corporate FCU as part of their due diligence
review process. John Fiore President/CEO Motorol
a Employees Credit Union
2
Capitalizing Alloya Corporate Federal Credit Union
  • May 24, 2011

3
Objective
  • Find a replacement for Members United Corporate
    Federal Credit Union.
  • Minimize the financial impact to MECU and its
    members.
  • Minimize the disruption in services and products.
  • Minimize conversion costs.
  • Invest in a corporate who is focused on member
    service through efficient and secure technology.
  • Invest in a corporate with the minimum amount of
    capital.
  • Invest in a corporate with a significantly lower
    risk profile and clean balance sheet.

4
History
  • Capital loss at Members United was realized on
    non-performing private label mortgage backed
    securities
  • On September 24, 2010, Members United was
    conserved by the NCUA.
  • On November 1, 2010, the NCUA formed Members
    United Bridge to facilitate the orderly
    disposition of Members United.

5
Business Plan Developed Based on Opinions from
Members of Members United
Members Want
Payments, Settlement, LOC
Convenience Premier View
Low capital buy-in
Low risk
Small operational impact
Great service
Great pricing
Charter a new corporate (90 polled)
Member Input
Volunteers
Individual member meetings
17 Town Hall meetings
Surveys
Informative Website
6
  • A Members Advisory Council was formed to develop
    a business plan that addressed the opinions,
    needs and wishes of Members United members.
  • The business plan entails Members United Bridge
    merging into Alloya Corporate Federal Credit
    Union. A new corporate built on the new NCUA Reg.
    704 which has a much lower risk profile and lower
    capital requirement.

7
  • Services to migrate efficiently and effectively.
  • All accounts, services and deposits of Members
    United Bridge will migrate to Alloya.

8
Value Proposition
  • A new corporate federal credit union with a
    proven value proposition.

9
Value of Relationship
10
Alloya Formation
  • At least 70 million of Perpetual Contributed
    Capital (PCC) required.
  • Formation is contingent upon raising capital and
    receiving charter.
  • Escrow reimbursed to MECU if not approved.

11
MECU Capital Requirement
12
Deposit Cap and Line of Credit Based Upon the
Amount of Capitalization
13
Intangible Benefits of Capitalization
Support a Cooperative System Solution
Helping Small Credit Unions
Strong Voice on Capital Hill
Protects Tax Exemption
Support Various CU Initiatives
Current Members United Bridge Members
14
Products and Services Used by MECU
Correspondent Services
ACH
Domestic Funds Transfer
International Funds Transfer
Coin Currency
Automated Settlement
Security Safekeeping
Western Union
Item Processing
Check Collection
Checking
Virtual Item Processing
Image Storage
Research and Adjustment Support
Product Education and Training
ACH Training
International Wire System
OFAC / BSA Basics
Virtual Item Processing
Credit Facility
Advised Line of Credit
Electronic Access
Premier View
15
Due Diligence
Alloya Corporate B Corporate C Third Party
Investment Required 796,0181 5,595,0002 900,0003 3,465,0004
Annual Cost for Services 67,078 89,899 76,150 108,824
Opportunity Cost on Investment5 17,353 121,971 19,620 75,537
Line of Credit 23,880,540 20 of Assets Pledged 10 of Total Assets 90 of Mortgages and Investments
1Investment based upon 3 day debit
settlement. 2Investment based upon total assets
as required by Corporate B. 3Investment based
upon total assets as required by Corporate
C. 4Investment based upon third party capital
requirement and related software and
hardware. 5Opportunity cost based upon recent
MECU investment rate at 2.18
16
Summary
  • Alloya is a viable replacement for Members United
    Corporate Federal Credit Union
  • Minimizes the financial impact to MECU and its
    members.
  • Eliminates the disruption in services and
    products.
  • Eliminates conversion costs.
  • A corporate who is focused on member service
    through efficient and secure technology.
  • A corporate requiring the minimum amount of
    capital.
  • A corporate with a significantly lower risk
    profile and clean balance sheet.
  • Management recommends MECU to invest in Alloya.
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