The NCUA on Friday assumed control of service and operations ofthe $31.1 million PEF Federal Credit Union of Highland Heights,Ohio, according to a release from the federal regulator.

During the conservatorship, the NCUA said it will work toresolve issues affecting the suburban Cleveland institution'ssafety and soundness.

According to the 2,974-member credit union's most recentfinancial performance reports, the top safety and soundness issueis loan quality. As of March 31, the community-chartered creditunion reported 10.59% delinquent loans and 6.17% charge offs.

Net worth plummeted from 8.12% as of March 31, 2012 to -0.27% asof Dec. 31. The credit union sold investments during the firstquarter to raise net worth back to 4.27% as of March 31.

PEF's real estate loan portfolio has shrunk from nearly $10million during the first quarter 2012 to $7.7 million one yearlater. The credit union was featured in a 2010 Credit UnionTimes articleabout small credit unions offering mortgage loans.

According to the credit union's website, PEFFCU was chartered in1957 and originally served the employees of Picker X-Ray Corp. Itconverted to a community charter in 2006.

According to an online chronicle of Cleveland history maintainedby Case Western Reserve University, the company employed as many as1,600 people in northern Ohio in the late 1990s.

After experiencing a series of buyouts, the company is now namedMarconi Medical Systems and is owned by the Netherlands-basedPhilips Electronics.

The Federal Credit Union Act authorizes the NCUA Board toappoint itself conservator when necessary to conserve the assets ofa federally insured credit union, protect members' interests, orprotect the Share Insurance Fund.

PEFFCU is the third federally insured credit union placed intoconservatorship during 2013.