DENVER -- New Horizons Community Credit Union, the Denver CU that fell victim to construction loan losses and Centrix Financial delinquencies, is going on the auction block in a purchase- assumption deal ordered by the state's top regulator. The $180 million New Horizons, whose dire financial plight last April triggered a state and NCUA-engineered conservatorship, "can no longer survive as a going concern," said Chris Myklebust, the state's commissioner of financial services.
Despite the best efforts of the state and NCUA, the Denver CU, said Myklebust, remains "critically undercapitalized" and therefore his office has started the purchase assumption process for the CU's assets.
That process, said Myklebust, will be managed by NCUA, but interested parties should contact his office by Feb. 1.
Once its troubles first became known last spring, the CU's assets plummeted from a high of $296 million to $180 million. New Horizons was once the state's 10th largest CU with Centrix listed as one of its SEGs, but last year examiners found large loan delinquencies in its construction and subprime portfolio triggering the conservatorship. A team of NCUA consultants was dispatched to Denver to run New Horizons following an ouster of top management and the naming of nine new directors. Myklebust said prior to the April conservatorship "there were half a dozen" CUs from Colorado and across the U.S. interested in merging New Horizons and he expects those same CUs may show interest again. He declined to identify any of them.
In a formal statement on the planned sale, Myklebust said the Division of Financial Services which he heads was notified Jan. 17 by New Horizons directors that it could no longer continue as "a going concern."
Assuring members their accounts were safely insured, Myklebust said the sale will not "negatively impact accounts" and although "there will be changes at New Horizons eventually, the process should be transparent" to members. Myklebust said there would be a charge to the National Credit Union Share Insurance Fund resulting from the purchase/sale "but I will refer you to the NCUA as to how much that might be." The Colorado regulator said earlier in the week that he planned to implement the sale process on New Horizons at a Jan. 18 meeting in Tempe, Ariz. with NCUA regional staffers.
New Horizons, with 26,000 members, was chartered in 1934 and has been serving employees of Gates Rubber Co. --firstname.lastname@example.org