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Missouri, Midwest Corporates cease merger talks

ST. LOUIS and BISMARCK, N.D. (6/13/03)--Missouri Corporate CU and Midwest Corporate FCU have notified their respective members that they are no longer pursuing a merger agreement.

After developing projections and conducting due-diligence reviews, the boards of both corporates have agreed to cease merger talks and continue operating as independent institutions. The reasons for the decision include operational issues and differences regarding account structures, according to their joint press release.

Last summer, the St. Louis-based Missouri Corporate invited several area corporates to attend a series of meetings to discuss the possibility of forming a new regional corporate credit union, based on the principles of cooperation and guaranteed representation. The idea was to form a well-capitalized corporate to provide outstanding member service, competitive products and services, and a strong commitment to safety and soundness.

Of the original group, only Missouri and Bismarck, N.D.-based Midwest were prepared to move forward with the idea. But as the two worked toward a consolidation plan, they realized that certain obstacles would be difficult to overcome--especially the overnight account structure.

"We have a single-rate overnight account, and Midwest offers a tiered-rate structure," explains Dennis J. DeGroodt, Missouri Corporate's president and CEO. "Each of us feels strongly about this product in terms of how well it meets our own members' needs. In the end, it was a major reason why the merger was called off."

Despite the decision, both parties remain positive about the future. "We look forward to maintaining a good relationship with Missouri," says Douglas C. Wolf, president/CEO of Midwest Corporate. "The bottom line is, we both want what's best for our member credit unions."

For now, both organizations plan to step back, reevaluate their individual strategic plans, and watch to see what happens in the corporate credit union industry over the next several months.