The Wisconsin Office of Credit Unions liquidated the 294-member New Covenant Missionary Baptist Church Credit Union of Milwaukee on Monday and appointed the NCUA as liquidating agent.
Wisconsin’s state regulator made the decision to pull the plug on New Covenant after “determining the credit union was in an unsafe and unsound condition to transact its business and had no prospect of restoring viable operations,” according to a release.
A quick review of the tiny credit union’s most recent financial performance reports reveal something went horribly wrong: net worth plunged from 8.45% in the second quarter 2012 to just -0.49% as of Sept. 30. Also from second to third quarter 2012, delinquencies increased from 7.44% to 19.63%, and net charge offs increased from -0.07% to 7.56% of average loans.
That loan quality correction prompted a nearly $64,000 third quarter loan loss provision for a credit union that had just $35,363 in undivided earnings. Albert Cooper Sr. is listed by the NCUA as the credit union’s manager.
New Covenant is the first federally insured credit union liquidation in 2013. Originally chartered in 1982, the state-chartered, federally insured credit union had assets of approximately $585,000. New Covenant served members of the New Covenant Missionary Baptist Church and related groups.