The proposed merger between $651 Kennebec Savings Bank and $51 mm KV Federal Credit Union would mark a first in Maine and would be among the first instances nationally of a credit union teaming up with a savings bank.  The deal is pending regulatory approval.

According to the AP, Mark Johnston, Kennebec Savings Bank president and CEO, said the two institutions had long talked about a possible merger, and the discussions accelerated in recent months.  The two institutions hoped to gain efficiencies and be better positioned to compete in a crowded banking market.

KV CEO Beverly Beaucage said the credit union's board came to the merger decision in part though declining options, explaining that the CU had considered first the possibility of merging with another credit union but had been unable to find one with the same roots or commitment in the local Augusta community.

By contrast, the perspective bank merger partner, Kennebec Savings Bank, has the local focus Beaucage said KV wanted.

The merged bank, which would carry Kennebec Savings Bank's name, would have combined assets of approximately $702 million. Officials hoped to complete the merger by June 30.

Last year, Haverhill Bank and Northeast Community Credit Union, of Birmingham, MA announced their plans to merge.  The result was an institution serving 20,000 with assets of $265 mm.

In 2006, Nationwide Bank and Nationwide Federal Credit Union completed a merger.

While consolidations of banks with credit unions remain rare, these examples highlight the extraordinary pressures facing banks and credit unions alike.