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After posting substantial losses in 2024 and the first half of this year, the $31.2 million 1st Choice Credit Union, conserved by the NCUA last year, was merged into the $739 million Hope Federal Credit Union in Jackson, Miss., the federal agency announced Thursday.
At the end of 2024, 1st Choice in Atlanta reported a loss of $2,561,503. Losses continued into the first and second quarters of this year, $835,466 and $808,382, respectively, according to NCUA financial performance reports.
Although the credit union showed no losses from 2021 to 2023, its loan portfolio dropped from $27.3 million to $22.6 million in December 2024 and fell again to $19.4 million by the end Q2. What’s more, delinquent loans and charge-offs increased substantially, indicating deteriorating loan quality.
In December 2024, 1st Choice’s delinquent loans and net charge-offs to average loans was 13.10% and 12.47% by the end of June, compared to peer average of 1.64% and 1.60%, respectively, according to NCUA financial performance reports.
1st Choice’s net worth cratered from 8.65% in 2023 to 2.52% in 2024. By the first and second quarters, its net worth dropped to -0.07% and -0.13%, respectively.
Equity also plunged from $3,474,380 in December 2023 to $709,588 in December 2024. Equity continued to drop to -$125,878 in the first quarter and -$90,893 in the second quarter, NCUA financial performance reports showed.
The NCUA, in consultation with the Georgia Department of Banking and Finance, placed 1st Choice into conservatorship on June 14, 2024, and appointed itself as conservator.
“The NCUA worked to address issues affecting the credit union’s safety and soundness and determined that merging 1st Choice Credit Union into Hope Federal Credit Union was in the best interests of the members,” the federal agency stated.
Chartered in 1991, 1st Choice’s seven employees operated two locations and served 7,637 members. The credit union was designated as a low-income and minority deposit institution, serving employees, retirees and former employees of various health systems in Atlanta, the Atlanta Life Insurance Company, South Fulton Community Development Corporation and members of the Getting Ahead Association.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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