Arrowhead Central Credit Union, an NCUA conservatorship that has been shrinking for months, is now closing eight of its California branches by year end.
The eight include six located in Stater Bros. Market stores plus two others in the San Bernardino area where the ailing $720 million CU has its headquarters.
There long has been speculation Arrowhead's serious financial problems and asset spinoffs, climaxed by the agency conservatorship June 25, would eventually lead to a purchase-assumption deal, but none has been forthcoming so far.
In a statement cleared through the NCUA, Arrowhead did say that its interim management has sharply reduced operating expenses by more than 30% from a year ago "while also reducing and eliminating some member fees including loan application fees."
The closing of the branches follows the sale this summer of four other branches to Alaska USA FCU of Anchorage.
The six Stater branches are in Loma Linda, Beaumont, Wildomar, San Bernardino, Fontana and Corona. Two other full-service facilities in San Bernardino and Norco will also be closing.
At one time Arrowhead had 29 branches in southern California. It now has 11.
At those remaining 11 branches, Arrowhead said it would be expanding hours to accommodate members of the closed facilities.
Kay Woods, Arrowhead's interim CEO appointed by NCUA, acknowledged in the statement that the branch closings reflect "this difficult business environment" but the action is necessary "to improve our infrastructure and service delivery options" in an overall program to restore profits.
"We want our members to know that their money is safe and the great service they are used to will be enhanced as we move forward," she said.
Arrowhead, which lost $47.8 million in 2009, for the first nine months reported a $3.8 million loss. Its net worth stood at 3.25%.
Arrrowhead's fate has also been fodder for the local media, which has frequently quoted ousted CEO Larry Sharp complaining that the NCUA conservatorship was totally unwarranted given the circumstances of the recession and comparable condition of other southern California CUs.
Sharp, now a college faculty member, had specifically questioned the $50 million set aside for potential loan losses and again accused the NCUA of regulating the credit union as if it were still 2009. "Why do you need to have $50 million out there? That's just, excuse me, ridiculous," Sharp told a San Bernardino reporter.
The NCUA has maintained the loan losses and potential write-downs were serious enough to warrant its action.
Regarding the branch closings, NCUA said last week the agency remains committed to maintaining uninterrupted, high-quality service to Arrowhead's members.