Security Service Buys Failed Family First FCU
The $6 billion Security Service Federal Credit Union, which last December took over the failed Beehive Credit Union in Salt Lake City in an NCUA-engineered transaction, last week acquired a second, conserved CU, the $119 million Family First FCU of Orem.
The San Antonio CU had actually been managing Family First since last October following the NCUA conservatorship July 30.
Security Service has become one of the prime acquirers the NCUA has turned to as a Utah suitor in a state that last year formally joined the sand states of California, Florida, Arizona and Nevada, all holding a number of struggling CUs and banks operating in a depressed economy.
Also merging former Utah CUs has been the $1.7 billion Chartway FCU of Virginia Beach, Va., which took over two ailing CUs.
"We are confident this acquisition will bring about positive changes for the Family First membership," said David Reynolds, Security president/CEO in a statement. "We are committed to providing our new members in Utah with the Security Service tradition of superior service, affordable products and attractive rates for deposits and loans." Terms of the Family First transaction were not disclosed.
Security Service said it might take until mid-summer when the computer conversion is complete, but signage and new marketing materials have been in preparation for weeks in anticipation of the NCUA-approved transaction.
As to whether more Utah mergers might be in the offing, John Worthington, senior vice president of the Texas CU, said, "Right now we have our hands full but we would have to look at each case as they arise."
Family First lost nearly $17 million and had negative net worth at year-end. Family First, with 18,000 members, was chartered in 1947 to serve employees of Geneva Steel Co. In addition to Orem, Family First has three branches and two Walmart facilities.
Underscoring its deteriorating condition, Family First's negative net worth ratio was negative 10.19% at year-end 2010, compared with negative 0.03% at the end of the third quarter. Its assets had declined by 5.9% in the last quarter, and the value of its loan portfolio declined by 9.6%.
Its delinquent loan ratio was 4.4% at the end of the fourth quarter 2010.