The troubled Silver State Schools Credit Union, Nevada's largest, is having to do more belt-tightening and announced the closure of five more branches coming in June as it operates under a consent order with state regulators.
In February, the $819 million credit union received a $22 million capital infusion from its private deposit insurer, American Share Insurance, but last week the Las Vegas CU said it has to do more consolidation to restore its financial health.
As of June 4, three metro Las Vegas branches and two Reno branches will close. The credit union did not disclose the savings anticipated or of the number of employees affected.
In an online "President's Message" to members, David Rhamy, president/CEO, explained that the CU has undertaken a multifaceted plan in line with a consent order with the Nevada Financial Institutions Division to fix its balance sheet.
The financial health plan was "developed and put in place through the cooperative efforts of staff, management and the board of the credit union as well as our state regulator and our deposit insurer," wrote Rhamy explaining that the plan "involves consolidation of our extensive, statewide branch network."
Regarding the branch closings, Rhamy wrote that "after careful analysis of multiple factors, including but not limited to transaction counts, profitability, deposit base, proximity of another branch office and growth potential, we have decided to close" the branches.
Neither CU officials nor George Burns, the state commissioner, were immediately available for comment.
Silver State finished 2009 with a $51 million loss, and its year-end financial report posted on the ASI website (www.americanshare.com) showed ROA of negative 5.6% and net worth at 2.8%, or $23 million.
Rhamy's message last week made reference to management's long-term struggle to improve its financial condition. "Much of what we have determined to be the best course for the credit union has already been effective as recovery is already in motion and improvement has been noted," said Rhamy, adding "However, more needs to be accomplished."
Silver State identified the facilities to close as Mae Anne and Damonte in Reno; Clayton in North Las Vegas, Desert Foothills in Las Vegas and Anthem in Henderson.
"We remain committed to serving the members who currently use the impacted branches with our other branches, our robust e-services programs and through our remote and automated access, including the CO-OP ATM Network and CU service center," the message concluded.