It's been less than a year since Rhett Rowe, a former bank president, took over as CEO of the $318 million Premier Members Federal Credit Union of Boulder, Colo. And he's got his sights on expansion.
Premier Members last week announced a merger deal with the $72 million Colorado United CU of Denver. It also plans to open two new branches in Wal-Mart stores next year.
“I was just a little surprised that there are no Wal-Mart branches of credit unions in Colorado, so it looks like we'll have the first,” said Rowe, who has more than a little experience in the ways of the nation's largest retailer, having served previously as a chief lending officer for the Walton family's bank in Bentonville, Ark.
That was before he became president/CEO of the First National Bank of Denver. He moved to Premier Members in October 2008.
The first major leg in Premier's expansion bid, said Rowe, is to merge Colorado United, which like a number of Colorado CUs found itself struggling to compete in the Denver market and willing to partner with the better capitalized Premier.
Once the merger is complete on Jan. 1, the combined CU will have 11 Colorado branches and 40,000 members. “We may look to entertain other mergers covering the Colorado Front Range from north to south,” said Rowe. And there's no reason “why we can't expand interstate as well,” he added.
The Premier CEO said he sees “both our planned merger of Colorado United and in-store expansion into Wal-Mart as what credit unions like ours need to do to grow.”
The first Wal-Mart branch is slated to open in Broomfield, a Denver suburb in May 2010, followed in July by a facility in Longmont. Broomfield is also where Colorado United has one of its three branches.
Under the Colorado United merger, Branda Abbott, its president/CEO will become chief operating officer of the consolidated CU. Colorado United was started in 1952 as Adams County School District CU and has three branches. Beside Broomfield, it also has branches in Denver and Arvada.
Rowe noted that Premier Members has enjoyed a healthy 9.33% capital ratio and ROA of 1.42% through June. Colorado United, meanwhile has had a 7.4% ratio and a $264,000 net loss in the first half, while gaining $691,000 for 2008. Colorado United had previously struggled to clean up mortgage debt, a job successfully tackled by Abbott, said Rowe.
The Colorado United merger with Premier would extend the Boulder CU's reach into the Denver market, where it has branches in Greenwood Village and Northglenn. Premier, launched in 1966, services a segment including Boulder-area IBM employees, “a coveted, well-educated base with good credit scores,” said Rowe.
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