Security Service Taking Over Ailing Norbel
The $5.5 billion Security Service Federal Credit Union of Austin, Texas said Wednesday it expects to take over the ailing $120 million Norbel CU of Fort Collins, Colo. by July 29.
The transaction will expand Security Service's Colorado footprint to include five branches in the Loveland/Greeley area and stretching to the Wyoming line. The deal has faint echoes of another 2007 takeover of $230 million Norlarco CU also of Fort Collins.
Norbel's serious loan problems prompted a PCA action against it this spring and a suggestion it start looking for a merger partner, according to a source familiar with the situation. NCUA's financial performance reports show Norbel's loan delinquencies at 7.25% as of March and an ROA of negative 31.56%. Norbel lost $9 million in the first quarter.
Neither the NCUA nor the Colorado Division of Finance has issued an official statement on the planned liquidation of Norbel and subsequent purchase and assumption by Security Service.
A statement from Security Service said it received a request from the Norbel management and the NCUA about a potential merger. It entered into a management agreement with Norbel on June 18.
"We have been following the normal procedure, and we look forward to consolidating Norbel into our organization," said John Worthington, senior vice president of Security Service.