Canvas grows West; CEO recharts organic growth
Canvas Credit Union plans to buy Western Rockies Federal Credit Union, pending the latter’s membership vote Dec. 30 and final regulatory sign-off on the link-up after ballots are counted.
The deal is set to bring the much-bigger buyer a Western Slope foothold, which its CEO said is as much about pushing organic growth into new geography as it is about traditional mergers and acquisitions.
“I’m a firm believer in investing in the culture — technology, people, infrastructure,” said Canvas CEO Todd Marksberry, “and growing from there.”
SPONSORED CONTENT
He said this is the first acquisition he’s been involved with in 29 years of credit union work, the last six or so with Canvas.
Buying “has not been a core part of our strategy,” he said, versus “significant internal investment.”
The buy gets Canvas the western presence; heavy investment in technology is part of the picture as well. Banks and credit unions had already begun to bet on this and with the pandemic went all in.
A BizWest banking roundtable in September included extensive discussion of ‘fintech’ and how to tap the trend.
Mountain Valley Bank’s acquisition of Cache Bank & Trust last month also involved the industry’s focus on fintech.
A press release on the Canvas acquisition of Western Rockies said “technology, compliance needs and innovation efforts to meet consumer expectations are a costly reality” for credit unions.
Canvas is based in Lone Tree but has nine of its 30 locations in Fort Collins, Loveland, Windsor, Greeley and Broomfield, its website said. The rest form a significant metro Denver presence. Now it seeks three new locations in the buy, between Fruita and Rifle, anchored by a Western Rockies’ headquarters branch in Grand Junction.
Western Rockies president and CEO Kristi Porter has worked there 42 years, about half in the top role.
“She absolutely has to be an integral part of this,” Marksberry said.
Both credit unions are about 85 years old.
Strategy
The three new branches are signposts along a 74-mile stretch of Interstate 70. This gives Canvas options for organic growth, Marksberry said, including filling in gaps along the highway, coming East to Aspen and the nine Northern Front Range locations, or heading south and filling out a map of the state overall.
“We’ve looked at how we could expand,” he said, “and it’s not just back to the east.”
Marksberry mapped out a hypothetical new-frontiers strategy. It runs south to Montrose, heads for Gunnison, which gets Canvas to Salida, and maybe ends up in Pueblo.
On what kind of work Canvas could bring west, Marksberry mentioned call centers and mortgages. If the growth heads east, residential lending could be significant in the ski resorts. He also noted the importance of community involvement and business banking, which Western Rockies, strapped for cash after the Great Recession and into the pandemic, couldn’t pursue.
“We want to be a job creator,” in the region, he said, “and learn from people on the Western Slope.”
Marksberry spoke with BizWest from Grand Junction, where he’d recently met each of Western Rockies’ 47 workers. Some of Canvas’ human resources people were staying a couple of extra days to lay out what a job with the buyer will look like. Canvas currently has 660 employees, Marksberry said.
It has $3.5 billion in assets, up from $3.1 billion at the end of last year and $2.7 billion in December 2019. The current number is up from $1.5 billion when Marksberry became CEO in June 2015.
Western Rockies has $173 million in assets. It had $149 million last year and $135 million in December 2019.
Canvas has 270,000 members, up from 262,000 at the end of last year and 255,000 in December 2019. Western Rockies has 14,500 members: it dipped by about 200 members between December 2019 and December 2020.
Reviewing
The next step in the process is the vote by Western Rockies members.
Boards of both credit unions unanimously approved the deal. The National Credit Union Administration in Alexandria, Virginia, and the Colorado Division of Financial Services, which oversees credit unions, have reviewed the application.
An NCUA spokesperson said via email the federal agency doesn’t formally approve voluntary mergers — those he said that involve “two healthy credit unions [which] decide to merge based on business decisions by their respective boards.”
NCUA instead reviews the merger application and, assuming “safety and soundness,” allows it to proceed.
“Ultimate approval of the merger rests with members,” the spokesperson said.
NCUA’s website showed no public comments had been submitted on the deal.
Colorado Financial Services Commission Mark Valente said via email that the five-member board of the Division of Financial Services “will not be voting on the merger.” Instead, Valente verifies the votes and “issue[s] a Certificate of Approval.”
As to more buying, Marksberry said, “We aren’t going to be looking at other mergers and acquisitions.” He used “branch” as a verb in describing how Canvas would continue to grow.
But he’s also chairman of a trade group covering Colorado, Arizona and Wyoming and “what I will do is always keep my ears open.”
He said, “we always listen to our friends” and the first two questions will be those he asked himself of the Western Rockies deal — “is it a good cultural fit?” and one he asked Porter, “How can I help?”
© 2021 BizWest Media LLC
Canvas Credit Union plans to buy Western Rockies Federal Credit Union, pending the latter’s membership vote Dec. 30 and final regulatory sign-off on the link-up after ballots are counted.
The deal is set to bring the much-bigger buyer a Western Slope foothold, which its CEO said is as much about pushing organic growth into new geography as it is about traditional mergers and acquisitions.
“I’m a firm believer in investing in the culture — technology, people, infrastructure,” said Canvas CEO Todd…
THIS ARTICLE IS FOR SUBSCRIBERS ONLY
Continue reading for less than $3 per week!
Get a month of award-winning local business news, trends and insights
Access award-winning content today!