The Nottingham Building Society and Shepshed Building Society have agreed in principle to merge.

This will be subject to approval by the members of The Shepshed and FSA confirmation.

It is expected to be effective from 1 July 2013 and the enlarged society will be called Nottingham Building Society.

There will be no compulsory redundancies as a direct result of the merger. Staff who currently work in The Shepshed’s branches will continue in their roles.

If it goes ahead, members of The Shepshed will have access to the Nottingham’s range of products and services and will be able to use The Nottingham’s 31 branches in Nottinghamshire and the surrounding area.

The Shepshed’s three branches will remain open for a minimum of three years and following the planned systems integration will also provide existing members of The Nottingham with three more branches.

Following the merger and planned systems integration, there will be a single head office, based in central Nottingham. The Nottingham has committed to offering all Shepshed head office staff an alternative role within the enlarged society.

No bonuses will be payable to members of either society arising from the merger.

“The Shepshed shares many of the same values we do,” said David Marlow, chief executive of The Nottingham.

“As member owned organisations we have a clear and simple purpose. We exist to serve the needs of current and future members, and to support the communities in which we operate. The Nottingham has been doing this successfully since 1849 and continues to build on our recent strong results.

“The Board of The Shepshed believe that their members’ interests will be best served by being part of a larger society. We are looking to forward to giving their members access to our full range of products and services.”

He added: “We believe that it is important that there are strong regional building societies offering a real alternative to the bigger banks. The proposed merger with The Shepshed will allow us to bring our own brand of high quality customer service, provided by local staff with local knowledge to a greater number of High Streets in our heartland.”

Gini Bolton, chairman of The Shepshed, said: “We have selected The Nottingham as our partner as it is the optimum choice. The Nottingham is the UK’s ninth largest Society with a head office close to our branch operating area and has the financial strength associated with a large mutual building society to provide assurance to our members.

“The directors of Shepshed Building Society strongly encourage the Society’s members to vote in favour of the merger.”