The NCUA said Thursday that two credit unions underconservatorship reported improved financials as of Dec. 31,2012.

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First, the $1.4 billion Texans Credit Union of Dallas reported acapital gain of 161 basis points during 2012, ending the year with2.68% net worth. The credit union also posted year-end 2012 netincome of $24.17 million.

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Loan quality has improved over the past 12 months. As ofyear-end 2011, delinquencies were 8.69% of total loans, and chargeoffs were 4.42% of average loans. Delinquencies improved to 0.94%as of Dec. 31, 2012; however, charge offs remain high, at 4.89% asof Dec. 31, 2012.

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Net margin to average assets fell during 2012, from 5.48% at2011 year-end to 4.44% one year later. However, operating expenseswere substantially reduced during that time, down from 4.36% ofaverage assets as of Dec. 31, 2011 to just 2.85% one yearlater.

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“We've restructured Texans, while continuing our focus on memberservice and attracting top-notch talent,” said C. Keith Morton,NCUA Region IV director. “As we begin 2013, we are encouraged bythe credit union's positive financial results and look forward tomany new product and service enhancements, such as remote depositcapture, online account opening and debit card purchaserewards.”

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NCUA placed Texans into conservatorship in April 2011 after commercial loan lossesdrained net worth. The NCUA filed a lawsuit in December 2012against former CEO David Addison, accusing him of breach offiduciary duty and gross negligence in his role in the creditunion's failure.

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In Key West, Fla., the $124 million Keys FCU also showedfinancial progress in 2012, reporting a net worth ratio gain of 80basis points in 2012 to end the year with 3.70% net worth.

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Keys reported a year-end 2012 net income of $965,714. The NCUAalso drastically improved the credit union's loan quality over thepast year, with delinquencies down from 3.03% as of 2011 year-endto 1.30% at 2012 year end. Charge offs fell during that same periodfrom 3.49% of average loans to just 0.44%.

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Keys voluntarily entered into conservatorship by NCUA inSeptember 2009.

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“We've restructured Keys to provide the members greater accessto services and products,” said Herb Yolles, NCUA Region III director. “As we begin 2013, weare encouraged by the credit union's positive financial results andlook forward to adding many new product and service enhancements,such as mobile banking and credit cards.”

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