Colorado Merger Would Create $750M Operation
Alan Peppers, president and CEO of DPS Credit Union, will soon run a $714-million CU, if plans to merge with smaller Safeway Rocky Mountain FCU are approved.
The $564-million DPS will merge with $150-million Safeway Rocky Mountain to better compete against banks coming to Colorado, because a combined operation will be more efficient, Peppers, 52, said. The new credit union will have eight branches and 55,000 members.
If Safeway Rocky Mountain's members, along with NCUA, approve the merger, it will become the third biggest credit union in Colorado.
"If you look at Colorado we had a tremendous amount of banks coming to the state in the last five years. Washington Mutual Inc. just today announced that they will be expanding nationwide by 250 branches; 25 of those will be in Colorado," he said.
The surviving charter will be DPS CU, Peppers said. "We'll be hiring a new advertising and creative firm that is going to help come up with a new name," he added.
DPS was organized 70 years ago to serve public school employees in Denver while Safeway dates back to 1951, when it was formed to serve grocery retailer Safeway Inc.'s employees.
Darrick Weeks, CEO of Safeway, said that for the next 18 months he will oversee the process of combining operations. Weeks will continue to serve in the merged credit union "beyond that in a role to be determined," he said. There won't be layoffs or closing of branches, and employees will retain all benefits, Weeks, 35, said.
Peppers said that the merger may help the credit union grow "at a more rapid pace" in terms of membership than the 1% to 2% recent annual growth rates.
He said he anticipated an expansion in assets in the 5% to 6% range for this year. The merger costs will be "on a conservative side about $500,000," Peppers said. Savings will come, he added, as a result of running a bigger operation. For example there will be the "opportunity to leverage resources in the whole technology arena," he said.