KENNEBEC, Me. – Officials of KV FCU have set a tentative agreement to merge into nearby Kennebec Savings Bank, the venerable thrift that traces its origins all the way back to 1870, in a new permutation of the credit union conversion to bank.
Both institutions are healthy, reporting similar return-on-assets of around 0.70 for the first half of the year, and both have steady growth. "I look at this as two local financial institutions that will be stronger combined," Mark Johnston, president and CEO of the $640 million savings bank, told The Credit Union Journal this afternoon.
Both are already the product of several mergers; KV FCU of a three way combination three years ago, and Kennebec Savings Bank of a two-way merger.
Under this deal, KV FCU will convert to a federally chartered thrift and Kennebec Savings Bank from a state to federal thrift, before combining.
NCUA’s new rules on conversions to mutually savings banks will require the 46-year-old credit union to first notify its members that the conversion is being contemplated and allow them to respond.
The boards of each institution are scheduled to vote on whether to proceed next month. If all goes according to plan the merger could be completed around next spring.