Texans CU: Ready to Recover From $46 Million Loss
The $2 billion Texans Credit Union said a $46 million loss last year was mostly tied to having to increase its commercial loan loss reserves.
The credit union ended 2008 with a "well-capitalized" net worth ratio of 7.9% in spite of a net loss from operations of $36 million combined with a one-time deposit insurance fund write-down and assessment totaling $10 million, said Mike Sauer, interim CEO and board member at Texans.
According to December 2008 NCUA call report data, the CU had nearly $358 million in member business loans and $216.7 million in construction and development loans. Delinquent loans totaled $68.5 million with chargeoffs at $15.4 million. The CU said it continues to originate business loans.
Sauer said NCUA's deposit insurance fund assessment also attributed to Texans' losses but will not impact operations. The CU is committed to reducing operating expenses this year, he pointed out. Texans plans to open two new branches this year and introduce a high rate checking account.
"Capitalization is the best indicator of financial soundness," Sauer said, "and Texans Credit Union's strong capital position, ample liquidity and conservative underwriting guidelines will allow Texans to weather the current economic cycle."
Texans President/CEO David Addison resigned on Jan. 31. Over the past few years, the CU had been plagued with several lawsuits from former executives and other entities.