St. Paul Croatian FCU Conserved, While Tracy FCU Is Liquidated
The NCUA took over the operations of one credit union and ended its management of another.
Following a quarter in which St. Paul Croatian FCU reported a substantial increase in delinquencies, the NCUA on April 23 placed the $250.8 million credit union into conservatorship.
The agency ended its conservatorship of Tracy Federal Credit Union in Tracy, Calif., when it liquidated the credit union last week and accepted an offer from Valley First Credit to purchase and assume its assets.
The conservatorship action means that the agency is running the day-to-day operations of the Eastlake, Ohio-based St. Paul Croatian, which has been in operation since 1947.
NCUA Region III Director Alonzo Swann III wrote members of St. Paul Croatian that because the agency is "sorting out the share and loan records and conducting an investigation into the circumstances leading up to the conservatorship," the agency is limiting withdrawals from member share accounts to $5,000 per week.
Swann wrote that he doesn't know how long the conservatorship will last.
NCUA Director of Public and Congressional Affairs John McKechnie declined to say if the agency is seeking to arrange a purchase and assumption.
According to the financial report filed with the NCUA earlier this month, the value of the credit union's loan portfolio increased by 3% during the first three months of 2010.
The value of its real estate portfolio declined by 71.9%, and the value of its unsecured loan portfolio fell 46.9%.
The credit union's net worth ratio was 12.6% and its delinquent loan ratio was 4.3%. It reported zero delinquencies over the four previous reports.
According to the most recent report, 16.5% of its real estate loans were delinquent by more than one month and 0.72% of those loans were delinquent by more than two months. Its ROA was 2.31%.
The credit union almost 5,400 members.
By accepting Valley First's offer, the agency was able to resolve the difficulties of Tracy, which like several other credit unions had been battered by the economic problems of the region.
Tracy FCU had been a $25.9 million credit union that saw its liabilities increase 27.2% during the last quarter of 2009 and a 89.6% decline in its net income, according to its financial report filed with the NCUA. The credit union hasn't filed a report for the first quarter of 2010.
In the last three months of 2009 its delinquency ratio was 3.85%, up from 3.54% in the third quarter.
It had a negative ROA as it had during the three previous quarters of 2009.
Valley First Credit Union, headquartered in Modesto, has $381 million in assets and has also been hurt by the California economy. Its net worth ratio was 10.73% at the end of 2009 and had a loan delinquency ratio of 1.56%, which is below the average of its peers.