PenFed Credit Union of McLean, Va., neared a 10% commercial delinquency rate in September, but was able to reduce it to 4.72% by year's end with the help of $74 million in write-offs.
The Washington, D.C.-area credit union was one of seven credit unions that accounted for 22% of 60-day-plus commercial delinquencies in the fourth quarter.
PenFed ($29.3 billion in assets, 2.7 million members) held $915.8 million in commercial loans Dec. 31, according to NCUA data drawn from Callahan's Peer Suite. Its 4.72% delinquency rate for commercial loans compared with 1.13% for other loans.
PenFed's commercial delinquency rate peaked at nearly 14% in the first half of 2024, and was reduced by a $105 million write-off in the fourth quarter of 2024 to a 2.25% delinquency rate. Commercial delinquencies had crept back up to 9.54% by September, but were again cut back by net charge-offs at a rate of 17.64% for the fourth quarter.
PenFed sent CU Times an email saying that it had reduced the size of its commercial loan portfolio over the past two years. NCUA data showed it has fallen from 6.2% of total loans in December 2023 to 4.0% at the end of last year.
"The few remaining problem loans have been fully reserved for and the remaining portfolio is stabilized," it said.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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