Stan Abrams was named San Diego Metropolitan Credit Union interim president/CEO this month, replacing Joseph Schroeder, who is now president/CEO of the $483 million Ventura County Credit Union.
Abrams, an industry veteran who left his long-tenured position as president/CEO of Vista Federal Credit Union to form his own consulting firm six years ago, said he was interested in the permanent job. He said he did not know if the San Diego Metro board was considering other candidates.
Like many credit unions in the Golden State, San Diego Metro did not have a profitable 2009. The $290 million San Diego Metro closed out last year with a $7.7 million loss, nearly $2 million of which was attributable to NCUSIF stabilization. It also reported a negative 2.71% ROA. However, the credit union remains adequately capitalized, claiming 6.51% net worth at year-end, down from a peak of 7.86% on June 30, but still higher than the year-end 2007 figure of 6.31%.
Real estate loan losses are to blame, Abrams said, and include problems in first and second mortgages and HELOCs. The credit union reported a problematic 6.09% loan quality ratio as of Dec. 31. However, Abrams said he thinks the losses are manageable.
"We are working on some specific objectives to return the credit union to profitability and increase net worth, and we're putting some new products into place to achieve those goals," he said.
Last month, then-acting CEO Linda Rossi launched an indirect vehicle lending program. And earlier this month, the credit union reintroduced its credit card program after selling off the portfolio and discontinuing the product years ago, Abrams said.
Should Abrams be awarded the permanent job, he may have to split his time between San Diego and Oakland if a case involving his stint at failed Kaiperm Federal Credit Union goes to trial.
Abrams is named as a defendant, along with the NCUA, in a case involving the 2007 sale of Kaiperm Federal Credit Union's headquarters building. Abrams was interim president/CEO of Kaiperm from October 2006 until September 2008.
The plaintiff alleges Abrams misrepresented Kaiperm's financial standing in the sale of the building, which included an agreement in which Kaiperm agreed to lease the building back from the new owner for 15 years.
Andrew Weiner, attorney for plaintiff 625 3rd Street Associates LP, said the value of the lease was included in the building's purchase price.
"A leased property is a lot more valuable than an empty property," Weiner said. The owner has been unable to lease the building since Kaiperm's failure, and it currently sits vacant, he said.
Key to the case is the Chicago-based Alliant Credit Union, which plaintiffs say offered to buy out the lease in May 2008, mere months after the 15-year deal was executed. Alliant was awarded the purchase and assumption of Kaiperm after the NCUA seized it.
Plaintiffs claim the revelation of Alliant's involvement with Kaiperm so soon after the soured real estate deal closed is proof Abrams knew Kaiperm was struggling at the time of the sale. Alliant was initially named in the suit but has since settled with the plaintiff, Weiner said.
Abrams expressed frustration at "not being able to defend myself publicly," but told Credit Union Times he nonetheless could not comment on the case while litigation is still pending.
The two parties will have separate hearings before U.S. District Judge William Alsup in June for a cross motion of summary judgment. If those motions fail, the case could go to trial.