A massive loan charge-off during the first quarter resulted inthe NCUA liquidating the $622,857 Electrical Workers #527 FCU of Texas City, Texas.
|In a release, the NCUA said it made the decision to liquidatethe credit union and discontinue its operations after determiningthe credit union was insolvent and had no prospect for restoringviable operations.
|That's an understatement, according to the 527-member creditunion's financial performance reports posted on the NCUA's website.As of March 31, net worth plummeted to -36.07%, down from 7.23% theprevious quarter.
|The credit union's loan portfolio shrank from $977,894 as ofDec. 31 to just $546,111 as of March 31, with significant lossesrecorded in both unsecured loans and consumer loans.
|Electrical Workers #527 had reported fairly high delinquencies –16.26% of total loans as of Sept. 30, 2012 and 11.69% as of Dec.31. Charge-offs were also high, reported as 7.08% as of 2012 yearend. However, that number increased to 185.60% of average loanscharged off in the first quarter.
|The credit union also saw a 688% increase in its loan loss provisioning during the first quarter, setting aside$294,494 for loan losses compared to just $149,480 at year-end. Theend result was a $295,220 net loss for the first quarter.
|Electrical Workers #527 served a number of select groupscentered primarily on electrical workers in the Texas City area. Itis the seventh federally insured credit union to be liquidated in2013.
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