It's getting ugly in the Sun Belt, and the NCUA hasn't even finished posting 1st quarter financials to its Web site.
So far, at least 18 credit unions in Arizona, California and Nevada are officially undercapitalized, reporting less than 6% net worth as of March 31. Seven are significantly undercapitalized, with net worth ratios between 3% and 4.99%, and three are critically undercapitalized, with less than 3% net worth.
The three critically undercapitalized credit unions-the $1.7 billion Arizona Federal Credit Union, the $162 million Community One Federal Credit Union, and the $89 million The Members' Own Federal Credit Union-were already in close contact with the NCUA, having fallen below undercapitalized status as of December 31, 2008.
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However, many undercapitalized and even significantly undercapitalized credit unions are new to the territory, posting net worth ratios well above 7% just one year ago. For most, the losses can be attributed to big increases in loan loss provisions and NCUSIF costs.
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