Two District savings and loan associations have abruptly terminated plans for a merger that the Federal Home Loan Bank Board approved last month.
Officials at Interstate Federal Savings and Loan Association and Home Federal Savings and Loan Association confirmed yesterday that they had reached a mutual agreement to call off the merger, which was to have become effective Aug. 1.
"Basically, there were differences in planning the organization," explained Ralph Childs, president and chief executive officer of Home Federal.
"We had a snag and agreed to discontinue," said Robert Barton, president of Interstate Federal.
Both men declined to be more specific.
However, industry sources say the merger agreement fell apart in a heated dispute over the assignment of personnel to new managers.
After two days of meetings on the subject, officials of the two associations concluded Wednesday that it was hopeless to proceed.
"I just don't want to comment on that," said Barton when asked to comment on matters that led to the dispute. "We just couldn't work it out, and I prefer to leave it at that."
"Under the circumstances that evolved, we determined that we couldn't blend the two organizations," said Childs, who added, "Bob Barton and I are still good friends. We both regret that it couldn't be worked out."
If the merger had been completed, Childs would have become executive vice president at Interstate, and six of Home Federal's directors would have been elected to Interstate's board. Those proposed changes had nothing to do with the dispute, however, officials said.
The two associations agreed in March to merge voluntarily after concluding that their relative strengths would position Interstate for anticipated stronger competition in the market.
They received quick approval from the Federal Home Loan Bank Board in March and had begun making preparations for the changeover when the rift occurred.
A "lot of energies" went into the process, but expenses were "minimal," Barton said.
The merger would have combined Interstate's assets of $295 million with Home's $215 million assets, solidifying Interstate's position as the fourth-largest S&L in the District. Interstate lost $5.6 million last year, but it has $33 million in reserves.
Home lost $3.1 million in 1981 and ended the year with a net worth of $8 million.
"It's back to the drawing board," Childs said.