Four-Way Colorado Merger Is Off

BOULDER, Colo. – A proposed four-way Colorado merger announced in January as being under review and which would create a $620 million credit union has apparently been called off with the $224 million Premier Members Federal Credit Union pulling out of the deal citing charter concerns of its sponsors. Premier, joined by the $300 million Norlarco CU in Fort Collins and two smaller suburban Denver CUs, said it had been in preliminary negotiations leading to a combination which would permit a broader range of member products and cost savings. The CUs soon found some problems. The Premier statement issued by Thomas N. Evers, president/CEO, said the merger would have reduced “the relationship of a significant sponsor” and that the “change in charter and sponsor relationship does not present the right fit for Premier and its members’ needs.” As a result, a spokesman for Norlarco said the merger deal was now dimmed by the departure of a key partner since “Premier was a very important link from a geographic standpoint and without its presence, a merger is difficult.” As originally envisioned, the combination of the two large Denver area CUs would provide important competition in a market with out-of-state banks and thrifts opening facilities in recent months. Also in the merger discussions were the $68 million Colorado Central of Arvada and the $54 million Horizons North of Northglenn. The president of Colorado Central, Michael Litzau, said though one of the parties is dropping out the remaining three CUs would now “rework the calculations and make an evaluation” on how to proceed. “Our board remains interested in the merger as we have experienced flat growth but with a good capital position,” said Litzau maintaining the additional service offerings and branches would be helpful to his institution. Evers said that while mergers such as this can be beneficial, the decision to pull out came because “a high concern” of the Boulder CU is maintaining a significant sponsor relationship “and that is one key driver behind this decision.” Evers declined to identify sponsors or elaborate on the objections, but the Boulder CU maintains a large member base at high-tech plants of IBM Corp. located in the area. -