GULFPORT, Miss.-The State of Mississippi Department of Banking and Consumer Finance has placed Gulfport CBC Credit Union, a federally insured, state-chartered institution, into conservatorship. NCUA is serving as conservator of the $17.4 million (as of year-end 2005) credit union. Gulfport CBC Credit Union will remain operational during the conservatorship but with limited lending, according to Mississippi Department of Banking and Consumer Finance Commissioner John S. Allison. Its 3,100 members' deposits are insured up to $100,000 per account by the NCUSIF, NCUA assured. "This didn't have anything to do with the effects of the hurricanes," Allison commented. "This is a problem credit union that had been under our watch for some time." NCUA said it concurred with the state regulator's decision. "At this time, we're just looking at the mismanagement of the credit union," Deputy Commissioner Theresa Brady said. Allison explained, "The previous board of directors and manager are no longer in there." Additionally, their accounts with the credit union have been frozen. He added that he is unsure whether the credit union will be able to get back on its feet on its own and a merger is a possibility. "That's undetermined at this point. That's why the conservator is in there," Allison added, "My goal is to have it.squared away in the first six months." He would not comment on whether the regulators suspected intentional fraud or incompetence. The credit union's net worth had fallen from 12.12% at year-end 2004 to 10.07% as of its September 2005 5300 Call Report. Delinquent loans and charge-offs increased dramatically throughout 2005. Gulfport CBC Credit Union primarily serves the civilian and military employees and families of the U.S. Navy's Gulfport Construction Battalion Center. The credit union has a better than 50% member penetration rate, according to its latest call report. -

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