Silver State Schools Credit Union Cuts Loss
The delay in reporting year-end results was far longer than expected, but the privately insured $718 million Silver State Schools Credit Union of Las Vegas managed to trim its year-ago losses by better than half to $21.4 million, though the CU still remained in a class as one of the nation’s most troubled.
President/CEO David Rhamy and officials from American Share Insurance sought to put the grim numbers, which included 4.32% net worth, in the best possible light.
Nonetheless, industry analysts both in and outside of ASI suggested the CU still faced tough times in 2011, though Nevada’s largest CU appeared to be on the right course in reducing delinquencies and cost cutting while it bolstered management ranks from the outside.
Silver State, which has been operating under close state scrutiny following a supervisory agreement in 2009, filed its year-end Call Report on March 10.
Dennis Adams, president/CEO of Columbus, Ohio-based ASI, blamed the reporting lag on a pileup of examinations coming at the same time, with back-to-back quarterly and semiannual exams from the state and ASI all taking place in February.
Silver State has been operating for more than a year under a $22 million capital infusion note from ASI, which in February renewed and extended the capital loan to 2015. Adams said the extension was granted "based on the progress we’ve seen and on that we are encouraged." The note is not payable until its term ends.
As he has during all of 2010, Adams voiced confidence that Silver state can recover. "They are doing all the right things, and management is on the right track to become viable as it continues to struggle in the depressed Nevada economy," he said. He refrained from making any forecasts regarding when Silver State might conceivably show a profit.
Fourth-quarter 2010 losses were pared to $4.4 million, down from the $15 million of a year ago. In 2009, the CU lost nearly $51 million. Its net worth a year ago was 3.64%.
The CU’s delinquency ratio remains at 7.74%, down from 8.19% a year ago, said the Call Report. Delinquent loans decreased to $46 million from $54.5 million at the end of the third quarter. The credit union's reserves for loan losses were boosted to 54% of delinquent loans, up from 47% three months earlier.
In its report, Silver State noted that it did record a $3 million fourth-quarter accounting charge related to what ASI officials said amounted to a "loan allowance cleanup."
Other real estate-owned loans took a jump in the fourth quarter, going from $2.4 million in September to $9.9 million in December.
In a statement, CEO Rhamy said the CU focused this past year on curtailing costs and reducing operating expenses.
Separately, it was disclosed that while Rhamy remains CEO, he is being assisted by a newly recruited Chief Restructuring Officer Michael Sacher, former partner-in-charge at the McGladrey Pullen accounting firm in Los Angeles.