MANHATTAN BEACH, Calif., and HUNTINGTON BEACH, Calif. (3/2/12)--The boards of two California credit unions--Kinecta FCU and NuVision FCU--have mutually decided to terminate their merger agreement, saying it would take two additional years to process, they announced Thursday.
Roger Ballard will continue as joint CEO of both credit unions while Kinecta conducts a CEO search process and puts a transition plan in place.
Both credit unions are independently strong and well-capitalized, they said. At the outset, their boards had agreed to move forward with the merger only if it offered substantial benefits with minimal disruption to members and their business strategies and operations.
However, as the credit unions continued to assess the length of time required for merger review, approval and integration, they estimated it would take an additional two years to complete the merger given the economic environment. They concluded that continuing the merger process for that amount of time would be too disruptive to their business and members.
"Merging two large, diverse financial institutions is an incredibly complex and time-consuming process that places significant demands on resources and diverts staff focus away from core business operations," said Darryl Johnson, Kinecta board chair. "Given the length of time now anticipated to complete the merger, both credit unions decided that moving the merger forward at this point is not in the best interests of either credit union or our members."
"We still believe there are great synergies between our credit unions, and look forward to exploring strategic opportunities that benefit our members. We have tremendous respect for the NuVision organization, and know it has a great future ahead," Johnson said.
NuVision board Chair Robert Geraci noted that the two credit union boards had "made excellent progress in our integration planning work, but both agree that continuing the merger through this extended length of time isn't the right strategy for either credit union or our members. We firmly believe that taking a hard look at the prospect of a merger was a worthwhile, positive process for both credit unions, and we each came away with new best practices we've already begun implementing that will benefit our organizations into the future."
Both credit unions said they were off to a strong financial start in 2012. NuVision members will continue to use Kinecta Financial & Insurance Services investment programs and Kinecta gift cards, which were introduced to the credit union last year. The credit unions also will continue to partner on joint community programs and other internal initiatives through 2012.
Huntington Beach-based NuVision has $1.2 billion in assets. Kinecta, based in Manhattan Beach, has $3.5 billion in assets.