Merger Awaits Vote, Reg. Approvals
If its members agree and everything goes according to plan, the Augusta, Maine, based KV FCU will simultaneously convert to a federal mutual bank charter and merge with the 139 year old Kennebec Savings Bank. But that move relies on the state chartered Kennebec Savings Bank changing to a federal mutual bank charter and that application is currently pending at the Office of Thrift Supervision, according to the regulators Web site.
KV FCU members will continue sending in their ballots until the member meeting on Sept. 21. The OTS has said it will have a decision on the Kennebec Savings Bank application by Sept. 7.
Alan Theriault, CEO of CU Financial Services, a consultancy for credit unions that apply to convert their charters, remained confident that the KV-KSB merger will go through. CU Financial Services is not a consultant in the KV-KSV applications.
"Both these institutions are solid, well managed and healthy institutions so I expect this merger will go forward from a regulatory point of view," Theriault said. "But with that said, both the Office of Thrift Supervision and the FDIC are being very careful about what they approve and they often want a lot more information than they might have had previously."
Theriault said the regulators now were very interested in the management of credit unions who were considering charter change, as well as earnings going forward (not considering the assessments made as part of the corporate stabilization plan). "No one wants to be stuck with any of that NCUA's problem credit unions," Theriault said.