CU executives at the participating CUs blamed the member defeats on a variety of factors, ranging from wariness over losing a hometown brand to anticipation of less personal service in addition to feared personnel layoffs. Montana First managers insisted there would be no firings.

At the Missoula CU, the Horizon proposal was rejected by 249 votes, with only 18% voting of the 7,200 eligible members on a base of 9,000. Following the vote, there were suggestions that there could be a revote at a later date.

Montana First executives insisted their own exit interviews at the special meeting held Jan. 5 showed a large number of members would have favored the merger bid had they been given more details early regarding improved tech-related products, including new mobile and home banking services.

"It is unfortunate that the turnout is so small but could affect the membership at large," lamented Christie Sisco, president/CEO of Montana First, stressing that the name of the organization was not going to change following the merger and that all of the employees were guaranteed a job. 

In Louisiana, the issues were slightly different, with sources privately blaming missteps by the board of Main Street Financial in handling the communication process on merger benefits.

"There were also some threats that members might lose their jobs," said one source asking for anonymity. There was also reported member resentment at the planned closing of a branch in Lake Charles prior to the merger taking effect.

John Lyon, Main Street Financial's chairman, said in a statement, "The board of directors is taking the merger vote under advisement, and further action is still being determined at this time."

The vote to kill the deal, held at a special membership meeting Jan. 17, was by an overwhelming margin of 1,000 votes, confirmed a spokeswoman for the CU. The CU has 15,300 members. The merger had been in the works for nearly a year.

For two years, the Baton Rouge CU had been struggling under the weight of corporate bailout costs, said Cary Anderson, the former president/CEO of Main Street who retired Dec. 1.

Main Street, formerly known as LA DOTD FCU serving employees of the Louisiana Department of Transportation and Development, lost $2 million in 2010 related to corporate costs, said Anderson. He added that the CU belonged to three corporates and that factors associated with the weak economy also took a toll.

Main Street, with 7.9% net worth, had been on the rebound, said Anderson, now an Asheville, N.C., consultant. He said he was surprised at the defeat of the merger bid, which he had supported. Since his departure, the CU has been headed by an interim CEO, Pat Duhe.

Remarked one insider, "This is a day of information overload, and I think people are able to get much more online information on a subject like this than they might have been used to in making judgments, but sometimes those interpretations can be wrong." 

Meanwhile at Montana First, the chairman of the CU, Mark Lodine, said he also agreed with Sisco on problems in educating the membership on merger advantages. Lodine was one of the authors of a column in the city's major daily, The Missoulian, supporting the merger while other members and a former CEO criticized the pact in letters to the editor.

"The members have now spoken and there is no use now getting into any kind of sour grapes," said Lodine. He said the credit union is well run and will continue to serve its members productively and profitably.

As for Horizon in Spokane, its management did not spell out what its next step might be in expanding into Montana following the Missoula miscue. The credit union has branches in the Idaho panhandle and in western Washington and wants to expand throughout this part of the Northwest.

Sisco of Montana First acknowledged mistakes may have been made in dealing with government employees, who make up the Montana First membership and are used to a heavy advance meeting procedure.

"Having our core membership as the U.S. Forest Service, in their daily work lives, they have public meetings on an on-going basis, and so going forward, we will keep their needs at the forefront," Sisco concluded.

In a brief statement, Horizon's CEO Jeff Adams noted that Members First members at the Jan. 5 meeting had asked for more time to consider the measure and possibly more meetings.