Few Insiders Share The Wealth From CU Conversions

ALBANY, Ga. -

On May 19, less than a year after taking their former credit union public in an initial public stock offering, nine executives and directors of Heritage Bank of the South, known until 2001 as AGE FCU, paid themselves 160,820 shares in the newly public bank, valued today at almost $3 million. The largest recipient of the stock grants - which vest in five annual installments but pay dividends immediately - was CEO Leonard Dorminey, who was given 53,300 shares valued at $900,000, according to Securities and Exchange Commission records. Along with stock he bought in the IPO, Dorminey, who engineered the conversion of the credit union that once served CSX Railroad employees, has amassed more than 84,000 in the ex-credit union-valued last Friday at $1.4 million. The former credit union executive is just one of a small group of managers and directors who have built up million-dollar stakes in just a few years after converting their credit unions to banks.

Others are: John Fiore, president of Synergy Financial (Synergy FCU), who has amassed almost $5 million worth of stock in the former credit union; Hans Ganz, president of Pacific First Bancorp (Pacific Trust FCU), $3.6 million worth of stock; John Hall, president of Rainier Pacific Financial Group (Rainier Pacific CU), $3 million; Kay Hoveland, president of K-Fed Bancorp (Kaiser FCU), $2 million; Robert Larison, president of Atlantic Coast Financial (Atlantic Coast FCU) $2 million, or Herbert Moltzan, who earned $1.5 million on his shares in BUCs Federal Bank (BUCs FCU) when he sold the former credit union to a Pennsylvania banking company three months ago.

Directors have also cashed in on their credit unions. Like the six former volunteers of Rainier Pacific, who have accumulated more than $1 million worth of stock in the fledgling bank, led by Edward Brooks, longtime chairman of the board, who has amassed $1.5 million worth of stock. Or Alvin Majors, chairman of the board at Pacific Trust, who has collected almost $2 million of stock in the bank he created out of a credit union.

That doesn't include the salaries and stipends now paid the former volunteer credit union directors, which average between $20,000 and $25,000 a year. In at least one case, Heritage Bank/AGE FCU, two directors, were awarded retirement pensions of $24,000 a year for their long-time volunteer work as credit union directors.