SALT LAKE CITY – Texas credit union giant Security Service FCU, which carved out a new Colorado market earlier this year with the acquisition of Norbel Community CU, is establishing itself for the first time in Utah with this week’s deal for Beehive CU.
In acquiring the remnants of the one-time $200 million credit union, San Antonio-based Security Service is picking up nine branches and some 18,000 members in the Salt Lake City market. The addition of branches in Salt Lake City, Provo, Riverton, Sandy, South Jordan and St. George will give Security First a total of 73 branches.
The $6 billion credit union has been managing all operations of Beehive, which has reported big losses for the past three years, since Oct. 29, when it entered into a management agreement with the Beehive board of directors at the behest of regulators.
By the time regulators shut Beehive, the credit union had lost almost $20 million over the previous three years, erasing all of its net worth, while its assets had declined all the way to $145 million.
Beehive, chartered in 1954 to serve employees of Utah state government, had attempted to convert to a mutual savings bank in 2007 but was denied by banking regulators as its loan losses mounted.
Security Service is one of a handful of giant credit unions that have been picking over the bonds of the growing number of credit union failures at the request of NCUA. Beehive will be at least the third failure acquired since 2008, including Norbel Community and Horizon CU, a 2008 Portland, Texas failure.
Beehive is the 29th credit union failure in 2010.
