Perhaps it was bound to happen given the continuing financial slide of the $667 million Silver State Schools Credit Union.
But latest Call Reports show the beleaguered Las Vegas CU, which for nearly two years has been on a regulatory watch list with its 3.85% net worth, is now second largest in the state to the $684 million One Nevada CU.
That Las Vegas CU has been undergoing a rebranding since October after it dropped the federal charter shedding its previous name, Nevada FCU. The fact is both CUs have witnessed a shriveling of assets over the years as they grappled with a severely depressed Nevada economy.
Last week, Silver State Schools said three branches in metro Las Vegas would be closed in January.
The privately insured Nevada CU formerly operated 21 branches from Las Vegas to Reno. It will now have nine. Since its troubles began in 2008-2009, it has shrunk in assets, employees and number of branches, closing them each year.
The three branches to be closed account for 15 employees, said the CU in detailing the closings.
The shuttering is needed “as a proactive step” to reduce expenses.
Meanwhile, the private insurer for Silver State, American Share Insurance Inc., once again reaffirmed its “collective commitment” to restoring that CU’s financial health though the timetable was altered this year.
Its new management led by retired Patelco CEO Andrew Hunter forecast that 2011 will end up in the red. Earlier, he had predicted the possibility of a small profit by year end, but that has apparently been erased by ongoing delinquencies.
Officials of ASI maintained that Silver State’s $5.5 million in losses for the first three quarters reflects Las Vegas’ “continuing economic struggles,” coming in a state with 13.4% unemployment, the highest foreclosures in the nation and record bankruptcies.
Dennis Adams, president/CEO of the Columbus, Ohio, insurer, told Credit Union Times the losses were not surprising, though Silver State “is generating solid preprovision expense monthly net income” despite the negative conditions diminishing gains. Those gains, he said, have been achieved through cost reductions and revenue enhancements that began in mid-2010 and now lower monthly losses are expected through year-end 2011.
Asked about the prospects for future ASI premiums, Adams responded that the insurer “announced a 15-basis points special premium assessment in September as its only assessment for 2011. There are no other assessments planned or needed this year.”
As for ASI’s $22 million capital assistance note funded in February 2010, nothing has changed on its status and has since been extended to 2015, said Adams. The note “was fully reserved at year-end 2009 in accordance with generally accepted accounting principles.”