Extending its interstate reach into a third state as part oflong-term strategy, the $432 million Horizon Credit Union ofSpokane Valley, Wash., said it hopes to complete by February amerger with the $63 million Montana First CU of Missoula, Mont.

The merger deal, which has been in the works since earlier thisyear, would give the central Washington CU entry into five Montanacounties. The 16-branch operation already has a presence in thenorthern panhandle of Idaho.

It is a transaction borne out of what Horizon managementcontends is a long term plan to expand regionally “in the Cascadeswhere we have the same demographics and cultural fit,” said JeffAdams, Horizon president/CEO.

Montana First was picked out based on a recommendation of asurvey done of potential Northwest CU partners by the RaddonFinancial Group of Chicago.

“After we did our due diligence, we agreed that would be a matchfor us,” Adams said.

With two branches, Montana First has 7,900 members andchartered 80 years ago to serve U.S. Forest Serviceemployees.

The transaction is subject to regulatory and membership approvalexpected in December.

Adams said the deals does not represent a case of a “troubledcredit union” seeking a healthy partner. Instead, he said, MontanaFirst saw the need to provide a broadened product/servicepackage through a larger entity,

Several years ago Horizon had considered a separate FOM expansion on its own intoMontana but later abandoned the idea as impractical. But theMontana First transaction “will work well for us,” said Adams.