DALLAS — Texas Credit Union Commissioner Harold Feeney said his agency is working closely with the $2 billion Texans Credit Union after the institution has taken substantial hits in its construction and development portfolio.

According to data from NCUA, Texans' member business loans granted grew from $104 million at the end of first quarter 2007 to $289.7 million by the end of the third quarter, a 179% increase. Business loan purchases during same period increased from $19.4 million to $113.9 million, a 487% spike.

Since year-end 2007 through the end of the first quarter 2008, the credit union's member business loans dropped from $311.2 million to $15.6 million, a 95% plunge.

Matthew S. Davis, executive vice president at Texans, told Credit Union Times, “Texans is currently at our regulatory cap for MBLs and therefore are not originating new ones.”

Davis said the CU is “absolutely” safe and sound. “Our capital ratio continues to be north of 9%, well above any industry minimum standards and in the range considered 'well capitalized' by the banking and credit union industry.”

Total delinquent loans to assets for the credit union stand at 4.25%, placing it in the 100 percentile of its peers (over $500 million in assets), which averaged 0.56%. Member business loan delinquencies (more than two months) reached 7.6% at the end of the first quarter 2008. Total foreclosed real estate skyrocketed from $11.1 million at the end of the first quarter 2007 to $83.6 million by the end of the first quarter 2008.

Two hours after making the above comments today, Davis sent an e-mail to Credit Union Times. In the later communication he said, “I would also like to clarify that we are still making business loans. We are not originating a significant volume of them as we are being very prudent in these very uncertain economic times. The cap issue is less of an issue than it was to us in 2006 or 2007 as we have stopped making any sizeable C&D loans.”

“Our MBL program is quite complex. We have member, regulatory and market factors that drive decisions on a daily basis.”