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Losses at Huron River Area CU Top $58.9 Million

When the real estate boom was booming, Huron River Area Credit Union boomed right along with it. But as the tide turned, so did the CU's financials.

By Staff Writer | Updated on September 04, 2007

ANN ARBOR, Mich. — When the real estate boom was booming, Huron River Area Credit Union boomed right along with it. But as the tide turned, so did the CU’s financials.

The contrast offers a lesson for CU managers and boards now that speculating in real estate development by mid-sized CUs isn’t the best way to achieve a positive balance sheet. The CU’s second-quarter loss is $58.9 million. Huron’s total loan portfolio was $193 million at the end of 2005 then jumped to $311 million in 2006, a remarkable 61% increase. At the end of June, HRACU had to put aside $61.5 million for loan loss reserves to cover loans likely to go south. But the bleeding wasn’t over; it further beefed up reserves as delinquencies kept mounting. So far this year it has reserved $73.1 million.

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