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Marsha Majors, president/CEO of the $1.4 billion U.S. Eagle Federal Credit Union in Albuquerque, N.M., said Monday that the planned acquisition of $499 million Southwest Capital Bank, also in Albuquerque, has been terminated.
Majors said the proposed bank buy deal was canceled after failing to receive regulatory approval. A termination letter was sent to the bank last week.
Southwest Capital Bank CEO Chez Steel told the Albuquerque Journal that recent losses at the credit union contributed to the collapse of the deal. He did not respond to CU Times' requests for further comment on Monday.
U.S. Eagle posted a $20.5 million second quarter loss of this year, compared to a $4.5 million gain during the same period last year. The credit union reported total credit losses of $28.7 million, a sharp rise from $3.1 million last year.
“The business lending portfolio is not performing as we’d hoped it would as impacted by the economic after effects of the pandemic, specifically our USDA and SBA portfolios,” Major said.
According to its second-quarter Call Report, the credit union posted $41.9 million in delinquent commercial loans more than a year old and charged off $4.5 million. Its total credit loss stood at $28.7 million at the end of June, compared to $3.1 million a year earlier.
“We’ve elected to recognize a loss within Q2 as we work through this process. While there has been impact to U.S. Eagle’s business lending portfolio, our core business remains strong, and we remain ‘Well-Capitalized’ per the NCUA. Our balance sheet has been structured to withstand fiscal stress in any one area of operations.”
The credit union’s current net worth is 9.09% compared to its net worth of 10.56% at the end of June 2024.
From June 2024 to June 2025, the credit union’s total loans dropped 3.7%, from $1.088 billion to $1.048 billion. Its allowance for loan losses rose 206%, from $14.6 million to $44.7 million. Total assets fell 3.8%, from $1.536 billion to $1.476 billion, while equity and undivided earnings declined by 14% and 17%, respectively.
Of the 22 credit union-bank acquisition agreements announced in 2024, three have been terminated. In addition to U.S. Eagle, the $4.7 billion TDECU in Houston dropped its acquisition of the $1.3 billion Sabine State Bank & Trust Co. in Many, La., in June, and the $2.4 billion Atlanta Postal Credit Union abandoned its proposed deal to purchase the $911 million Affinity Bank in Covington, Ga., in December.
Eleven of last year’s credit union-bank buy agreements have been completed and eight remain pending.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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