What's Next for Insolvent Certified FCU?
Will the NCUA seize the $35.7 million Certified FCU, which tumbled to -17.11% net worth as of June 30?Spokesman John McKechnie would not comment on future regulatory action against the Commerce, Calif.-based cooperative, but said Certified was "under normal supervision."
Certified's fortunes turned dramatically during second quarter, when delinquencies increased to 12.29% and return on average assets plunged to -45.19%.
Also during second quarter, real estate loans experienced significant restructuring, reclassification or were sold, fixed rate mortgages increased from $8 million to $13.7 million, while $7.5 million in adjustable rate first mortgages with terms less than one year were replaced by $2.7 million in adjustable firsts greater than one year. Four million dollars worth of balloon/hybrid mortgages were eliminated completely last quarter.
Net charge offs increased from $2 million as of March 31 to $5 million as of June 30. Certified also claimed nearly $7 million in new non-operating expenses last quarter.
Two anonymous sources told Credit Union Times they are privy to a deal that will merge Certified into the $332 million Vons Employees FCU, which shares Certified's grocery industry field of membership. The El Monte, Calif.-based Vons EFCU is stocked to the rafters with capital, topping 20% net worth as of June 30 and earning more than $2 million net profit year-to-date.
Certified Manager Jim Carlin, who took over for former President/CEO Jeffrey Weinstein, did not return a call requesting comment. Neither did officials from Vons EFCU.