Ailing SONEPCO, 1 of 2 Nevada CUs Being Merged
With regulator encouragement, two more Las Vegas credit unions have opted for the merger route, one, the long-ailing SONEPCO FCU, being hooked up with the $502 million SCE FCU of Irwindale, Calif.
The $59 million SONEPCO, has a 5.5% net worth ratio, said in May the NCUA wanted it to find a merger partner. The CU lost $1.2 million in the first three months of the year, adding to a string of losses.
Meanwhile, the $20 million SWG FCU, which in July detailed a proposal to merge with the $76 million Sierra Pacific FCU of Reno, said NCUA had now approved the deal to become effective at yearend.
“I think they saw the need to affiliate with a larger organization and it works for us since we both are in the energy field,” said James Hunting, president/CEO of Sierra Pacific.
Under the transaction, Sierra Pacific will be able to expand into Arizona since SWG, which services Southwest Gas Co. employees, retains a Phoenix branch. Sierra Pacific has 5,200 members while SWG has 2,600.
SCE, located in a Los Angeles suburb and with four branches, has said discussions with SONEPCO have been ongoing for nearly a year.
SONEPCO had traced its problems to housing loans that had gone bad and a high delinquency rate which it had hoped to ebb. SONEPCO has 4,800 members while SCE has 43,000.