AM Community Credit Union Liquidated; MBL Delinquencies Tanked Financials
After the NCUA placed it into conservatorship in February, the Wisconsin Office of Credit Unions placed the $122 million AM Community Credit Union of Kenosha, Wis., into liquidation Wednesday and appointed the NCUA liquidating agent. The $739 million TruStone Financial Federal Credit Union of Plymouth, Minn., purchased and assumed AM Community’s members, deposits, core facilities and consumer loans.
According to call report information posted on the NCUA’s website, AMCCU’s key financial indicators took a nose dive in early 2011, when delinquent loans to total loans skyrocketed from 2.86% in December 2010 to 7.35% as of March 31, 2011 and provision for loan losses to average assets rose from 0.31% to 10.19% during the same time period. Net worth fell below 7% as a result and never recovered. As of June 30, 2012, net worth was 1.66%.
Business and real estate loans represented the vast majority of delinquencies and charge offs in AM Community’s June 2012 call report. Of $9.65 million in delinquent loans as of June 30, nearly $5 million were business loans, and another $2 million were modified real estate loans. Year-to-date charge offs numbered $1.35 million, including more than $1 million in 1st mortgages. The credit union’s loan quality index was nearly 18% as of June 30, including a 14.31% delinquent to total loans figure.
The credit union was the subject of a 2008 article in Credit Union Times when it turned to participation lending after reaching its member business lending cap. AMCCU partnered with Business Lending Services, LLC to “offer participation loans to not only help spread the risk but to provide members with the larger loans they were asking for.”
At the time of liquidation, AM Community served 15,993 members and served those who live or work in Wisconsin’s Kenosha or Racine counties and any Chrysler Corporation employee. TruStone Financial has more than 60,000 members and serves various employer groups and individuals who live, work, worship, or go to school in the cities of Minneapolis and St. Paul, Minn.
AMCCU is the seventh federally insured credit union liquidation in 2012.