NCUA Director of Congressional and Public Affairs John McKechnie said the agency's decision to place Arrowhead Central Credit Union executives on paid leave, rather than dismiss them, is not unusual, particularly while the NCUA is reviewing operations.
"The NCUA is focusing on maintaining stability and uninterrupted service to members, and protecting member assets, all of which may be enhanced by the retention of certain employees," McKechnie said.
The $876 million, federally-insured and state chartered Arrowhead was placed into conservatorship Friday afternoon. The San Bernardino-based credit union had been significantly undercapitalized since Sept. 2009, with 3.36% net worth as of March 31, 2010.
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Arrowhead had posted a $2.6 million profit during first quarter 2010, and was about to record the sale of branches and deposits to Anchorage-based Alaska USA FCU, effective this past Saturday.
However, as of March 31, Arrowhead had set aside almost $50 million for loan loss allowance and reported nearly 8.5% combined delinquency and charge-off ratio. Member business loan delinquencies jumped to 5.19% as of March 31, up from 2.17% in fourth quarter 2009 and only 0.46% in 1st quarter 2009. Of Arrowhead's $81 million in outstanding member business loans, $73.7 million are classified as real estate.
According to the U.S. Bureau of Labor Statistics, the San Bernardino County unemployment rate was 14.1% in April.
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