The NCUA said Thursday that two credit unions under conservatorship reported improved financials as of Dec. 31, 2012.
First, the $1.4 billion Texans Credit Union of Dallas reported a capital gain of 161 basis points during 2012, ending the year with 2.68% net worth. The credit union also posted year-end 2012 net income of $24.17 million.
Loan quality has improved over the past 12 months. As of year-end 2011, delinquencies were 8.69% of total loans, and charge offs were 4.42% of average loans. Delinquencies improved to 0.94% as of Dec. 31, 2012; however, charge offs remain high, at 4.89% as of Dec. 31, 2012.
Net margin to average assets fell during 2012, from 5.48% at 2011 year-end to 4.44% one year later. However, operating expenses were substantially reduced during that time, down from 4.36% of average assets as of Dec. 31, 2011 to just 2.85% one year later.
“We’ve restructured Texans, while continuing our focus on member service and attracting top-notch talent,” said C. Keith Morton, NCUA Region IV director. “As we begin 2013, we are encouraged by the credit union’s positive financial results and look forward to many new product and service enhancements, such as remote deposit capture, online account opening and debit card purchase rewards.”
NCUA placed Texans into conservatorship in April 2011 after commercial loan losses drained net worth. The NCUA filed a lawsuit in December 2012 against former CEO David Addison, accusing him of breach of fiduciary duty and gross negligence in his role in the credit union’s failure.
In Key West, Fla., the $124 million Keys FCU also showed financial progress in 2012, reporting a net worth ratio gain of 80 basis points in 2012 to end the year with 3.70% net worth.
Keys reported a year-end 2012 net income of $965,714. The NCUA also drastically improved the credit union’s loan quality over the past year, with delinquencies down from 3.03% as of 2011 year-end to 1.30% at 2012 year end. Charge offs fell during that same period from 3.49% of average loans to just 0.44%.
Keys voluntarily entered into conservatorship by NCUA in September 2009.
“We’ve restructured Keys to provide the members greater access to services and products,” said Herb Yolles, NCUA Region III director. “As we begin 2013, we are encouraged by the credit union’s positive financial results and look forward to adding many new product and service enhancements, such as mobile banking and credit cards.”