The NCUA and the Colorado Division of Financial Services has announced the unassisted merger of the $4 million Trinity Credit Union of Trinidad, Colo., with the $82 million Power Credit Union, located some 85 miles to the north in Pueblo, Colo.
The 73-year-old Trinity was placed into conservatorship July 27 by the Colorado Division of Financial Services. The state regulator then appointed NCUA conservator.
Trinity had nearly 1,200 members and served the residents of Las Animas County, Colo.
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The failed credit union's financial situation had already begun to deteriorate by December 2010, when nearly 11% of total loans were reported delinquent. The credit union ended 2010 with a $41,715 profit but couldn't get loan quality under control in 2011, with 9.38% delinquency and 5.59% charge offs in June and a slight improvement to 6.76% delinquencies and 2.87% charge offs as of December 31.
Loan quality improved this year to 3.74% delinquencies and just 0.88% charge offs as of June 30, but the damage to the portfolio was already done. During the 12 months prior to June 30, the credit union lost one-third of its net worth, loans to shares tumbled from 64.7% to 38.6%, and gross income to average assets fell 180 basis points. The credit union also reported a nearly -$40,000 annualized loss as of June 30.
The NCUA said in a release Monday that the merger occurred without assistance from the National Credit Union Share Insurance Fund. Power Credit Union, as part of the merger deal, will maintain a branch in Trinidad, and the merged Power members will experience no interruption in services, the NCUA said.
Power is a state-chartered, federally insured community credit union, and also has a long history, opening in 1938. Before the merger, Power had nearly 11,400 members.
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