A week after placing $250 million St. Paul Croatian Federal Credit Union into conservatorship, the NCUA on May 1 announced it was liquidating the credit union after determining that it was insolvent and had "no prospects for restoring viable operations."
About 12 hours before announcing the closing, the agency also announced that Region III Director Alonzo Swann was being transferred to be special assistant to NCUA Executive Director David Marquis and Region II Associate Regional Director of Operations Herb Yolles would serve as acting Region III director, effective immediately. St. Paul Croatian FCU is located in Cleveland and Eastlake, Ohio, which is part of Region III.
NCUA Director of Public and Congressional Affairs John McKechnie said the agency is still assessing the extent of the credit union's financial problems and conducting a valuation of assets. He declined to say whether there are any suspicions about wrongdoing in the credit union's operations.
McKechnie also declined to comment on Swann's transfer, saying the agency doesn't discuss personnel moves.
The credit union's collapse is the second blow for St. Paul Croatian Church in recent weeks. According to The Plain Dealer in Cleveland, the Securities and Exchange Commission filed a lawsuit against Integrity Financial AZ and four individuals, saying the defendants fraudulently enticed 58 people, including members of the church, to invest more than $8 million in a bogus real estate program.
While the credit union's stated net worth ratio was 12.6%, its delinquent loan ratio was 4.3%. Prior to that, the credit union hadn't reported delinquent loan data in the four previous reports.
According to the financial report filed with the NCUA in April, the credit union's loan portfolio increased by 3% during the first three months of 2010. Its real estate loans fell by 71.1% and its unsecured loans fell by 46.9% but its other loans increased by 32.4%.
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 return on assets was 2.31%.
This year, the NCUA has closed 10 credit unions. In all of 2009, the agency closed 28 credit unions.
St. Paul Croatian FCU had almost 5,400 members.