Lobby of the NCUA.
The $4.4 million Community Owned Federal Credit Union in Charleston, S.C., has been conserved, the NCUA said Tuesday night.
According to the independent federal agency, the credit union chartered in 1966 to serve low-income members was operating under unspecified "unsafe and unsound practices."
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From 2015 to 2019, C O Federal Credit Union's financial performance reports recorded no net losses and posted growth in loans, assets and members, though its net worth fell from 11.45% in 2015 to 6.78% in 2018. In 2019, its net worth shot up to 19.42%.
However, the credit union posted net losses in last year's three quarters. At the end of the first quarter, C O Federal Credit Union recorded a net loss of nearly $40,000, a loss of more than $31,000 in the second quarter and a $37,653 loss in the third quarter. Fourth quarter financial performance reports are not currently available.
At the end of March, the credit union posted a net worth of 8.04%, which declined to 7.43% in June but increased to 10.68% in September.
What's more, the credit union's delinquent loan ratios have been substantially higher than peer averages.
For example, C O Federal Credit Union's delinquent loans to total loans ratio was 5.32% compared to the peer average of 1.66%, and its delinquent loans to net worth ratio was 34.38% compared to the peer average of 5.38% at the end of the third quarter, according to NCUA financial performance reports. The credit union's net charge-off ratios also have been much higher than the peer average.
The NCUA said C O Federal Credit Union remains open for member services and is working to resolve the unspecified issues affecting the credit union's operations.
The credit union operates one branch and has 785 members of The Citizen Committee of Charleston County and members of the International Longshoreman's Association, Local #1422 in Charleston.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
