Poor Financial Condition, Lack of Growth Drive Troubled Mergers
The NCUA’s November insurance fund activity report reveals the regulator approved 23 mergers, including three prompted by poor financial condition, and three more experiencing a lack of growth or lack of sponsor support.
In Texas, the $39 million Fort Worth Telco CU reported a net loss of nearly -$72,000 as of Sept. 30, 2012, and hasn’t seen 7% net worth since Dec. 2009. It will merge into the $1.45 EECU, also of Fort Worth.
The $15 million Appalachian FCU of Berea, Ky., will be merged into the $155 million Appalachian Community FCU in Kingsport, Tenn. The merging credit union reported 3.39% net worth as of Sept. 30, 2012 and nearly 14% delinquent to total loans.
The $8 million East Coast CU of Wilmington, N.C., will be merged into the $221 million Piedmont Advantage Credit Union of Winston-Salem, N.C. The merging credit union just slipped below 7% net worth in Sept. 2012 after posting a $160,000 net loss fueled by a $122,000 loan loss provision.
The $335 million Newport News Neighborhood FCU of Newport News, Va., reported a lack of sponsor support drove it to merge into the $1.7 billion Langley FCU, also of Newport News. The community-chartered credit union, which served those who work or reside in the city, reported strong net worth and ROAA, but problems with lack of loan and membership growth: as of Sept. 30, NNNFCU reported a 23.31% annualized loss of membership.
The $19 million Washington Postal Employees FCU of Washington, D.C., and the $1.3 million Steel Crete Employees FCU of Beech Bottom, W.Va., both reported lack of growth as their reason to seek mergers. They will be absorbed by the $315 million FedChoice FCU of Lanham, Md., and the $18.6 million Tin Mill Employees FCU of Weirton, W.Va., respectively.
The $3 million Canadian National Railway Employees FCU of Terry, Miss., will be merged into the $1.1 billion Magnolia FCU of Jackson, Miss., due to an inability to obtain financials, the NCUA said.
Other mergers of note include two in California: the $55.7 million Safeway Los Angeles FCU of Norwalk, which will merge into the $750 million Xceed Financial FCU in El Segundo, and the $72.5 million State Center CU of Fresno, which will merge into the $414 million Valley First CU of Modesto