Telesis Community Credit Union Member Business Loans Swimming in Red Ink
From unfunded commitments and unsecured revolving lines of credit, several of Telesis Community Credit Union member business loan categories have been in a free-fall since at least 2010.
Late Friday, the NCUA was appointed the conservator of the $318 million, Chatsworth, Calif.-based Telesis after the California Department of Financial Institutions placed the credit union in conservatorship due to declining financial conditions.
A scan through Telesis’ December 2011 NCUA Call Report, the latest on record, revealed a number of areas in the negative territory.
From December 2010 to December 2011, Telesis went from nearly $202 million in MBLs to $152.6 million at the end of last year. Unfunded commitments also dropped significantly during the same period going from $1.1 million to $314,000.
In the non-real estate secured loans to members and nonmembers, Telesis experienced several hits to its portfolio over a nine-month period. The credit union had $5.6 million in commercial and industrial loans in March 2011 and $4.1 million in December 2011. Unsecured business loans plummeted to $966,505 at the end of last year from nearly $1.6 million in March 2011.
Member business loans that were delinquent for one year or more continued to increase from December 2010 to December 2011 going from $5.2 million to nearly $18 million. For the same period, loans that were delinquent for six to 12 months were not as high at $12.4 million in December 2010, dropping to $3.8 million in December 2011.
At the end of last year, Telesis had $144 million in participation loans outstanding, down from $176 million in December 2010. The credit union sold $29 million in participation loans at the end of last year.
Telesis made its entry into business lending as Telesis Partnerships LLC. In 1995, it became Business Partners LLC, a CUSO that was originally owned by more than a dozen credit unions nationwide. At its peak, Business Partners served more than 180 credit unions.
As recent as January 2011, Business Partners had formed BP Connect, a loan participation network to connect buyers and sellers.
Credit Union Times has not received a call back from Business Partners, Telesis or the NCUA.