Merger Rejected, 'Disappointed' Louisiana's Jefferson Financial CU Looks at Second Try
The president/CEO of Louisiana’s Jefferson Financial Credit Union, a suitor in a failed merger bid this week, said "the messaging could have been better" in trying to sway members of the targeted Main Street Financial FCU of Baton Rouge.
Still, despite “the disappointment and the hard work we’ve put in,” the $260 million Metairie CU will explore another merger try after consulting with regulators, said Mark Rosa, the Jefferson head.
“We’d like to get another shot,” Rosa said after Wednesday’s 1,000-vote member rejection of Jefferson’s offer to consolidate the $96 million Baton Rouge CU and form the state’s fifth-largest CU.
The Jefferson/Main Street combination “was really a great fit and would have vastly improved” online services to the Baton Rouge market, Rosa said, adding that it comes at a time when Main Street Financial like many other financial institutions has undergone “a credit crisis” resulting from the recession.
The messaging about the merger “became confused,” Rosa acknowledged. He said Jefferson Financial might have explained to members more clearly “how this kind of credit crisis had weakened” Main Street over the past three years and that a merger would work out well.
The Baton Rouge CU had lost $2 million in 2010 after absorbing large hits on corporate investments but had shown a small profit through the first three quarters of 2011.
Main Street Financial has 5,300 members and in December saw its president, Cary Anderson, step down.
“We are a healthy, well-capitalized credit union, knock on wood, but a partnership with Main Street would have created an important statewide credit union,” said Rosa, whose CU serves a suburban New Orleans market.
Somehow, there was a breakdown in communication as the two boards tried to put forward the merger, Rosa said, defending a move by Main Street Financial, criticized by some members, to close a Lake Charles branch.
That decision, said Rosa, was made to cut costs and Main Street retains nearby facilities to serve that market.
Officials close to the negotiations said the vote also may have been affected by what Rosa said were rumors that many Main Street Financial employees would lose their jobs in a merger.