Silver State Negotiating 5-Year Extension on $22 Million ASI Loan
The ailing $791 Silver State Schools Family CU of Las Vegas is negotiating with its private insurer, American Share Insurance Inc. of Ohio for a five-year extension of a $22 million capital infusion loan made in February.
Dennis Adams, president/CEO of Dublin-based ASI, said the insurer had long planned on the extended terms when it made the loan as part of a plan to bolster the weakened capital base of Silver State, Nevada's largest and most troubled. The original February loan matured Aug. 11 with a temporary extension for longer term payments granted through Sept. 30.
"We've been really pleased at the progress made by the management team which has worked extra hard and so it looks to us like they have a small profit in November or December," forecast Adams. "That's pretty good news in a state still suffering so much from the recession."
The ASI head also for the first time confirmed ASI's prominent role in helping Silver State toward recovery including placing "our own consultant" in the management team. The consultant has been acting as a "chief restructuring officer" in the hierarchy, said Adams declining to identify the individual in accordance with what it said are ASI policies.
The restructuring officer assists the president/CEO David Rhamy as well as other senior executives involved in operations, auditing and other functions, said Adams.
Silver State, which had been operating under a state regulatory consent order, set aside $26 million in allowances for potential loan losses on June 30, but it did record $60.8 million in loans past due two months or more, noted Adams.
Its net worth, which includes the $22 million loan, was 4.9% on June 30, "the lowest of 11 Southern Nevada credit unions" as noted in an article by the Las Vegas Review Journal. Silver State's net loss for the first half was $13.4 million compared to a $51 million loss for all of 2009.