Losses Continue at Silver State Schools
Under a new CEO, Silver State Schools Credit Union of Las Vegas reported a third quarter net loss of $2.8 million, bringing the year’s total to $5.5 million.
The struggling credit union’s assets also continued to drop to $667 million from the second quarter $711 million and its net worth ratio was 3.7%.
But management for the privately insured Nevada CU insisted in a prepared statement that year- to-date results “compare favorably with a net loss of $17 million for the same period” a year ago.
“We had hoped to see more progress but again the provision for loan losses impacted earnings,” said Andrew Hunter, the former Patelco CEO hired last July to take over the beleaguered Nevada CU.
Hunter, who is altering an earlier forecast that losses might be eliminated by the end of the year, said the CU had recognized $750,000 of deposit insurance premium expense during the quarter.
Silver State Schools is insured by American Share Insurance Inc. of Columbus, Ohio which two years ago extended a $22 million capital infusion note to the CU.
Hunter noted that the CU’s earnings for the third quarter “before the provision for loan losses and excluding the insurance premium was a solid $3.7 million.”
“Like other financial institutions in Nevada, and especially in Las Vegas, we are concerned about the high numbers of struggling borrowers and distressed loans, both for the human cost to the borrowers and the financial cost to our institution.” said Hunter, stressing management has to be “realistic” about market conditions.
“We continue to search for ways to improve our financial results,” Hunter. "We're looking for improvements in mitigating losses, increasing revenue and reducing operating costs."
He also again said that Silver State Schools is not looking for a merger with a healthier CU in California or elsewhere. "We believe our future is as an independent credit union," Hunter said.
In its third quarter report, Silver State Schools also showed delinquencies rising to 9.75% or $53.7 million. The allowance for loan losses remains at $30.2 million.
“We expect overall improvement in the fourth quarter, but not dramatically,” Hunter concluded.