PHOENIX – Some of the nation’s largest credit unions are reporting record losses this week, threatening the existence of some of them and posing the potential of big losses for the National CU Share Insurance Fund.
The miserable fourth-quarter and year-end credit union reports come as the banking crisis is deepening, sending the stocks of some of the nation's biggest banks to all-time lows.
Arizona FCU reported a whopping $64.4 million loss yesterday for the fourth quarter, giving the $1.6 billion credit union a $115.9 million loss for the year, one of the biggest losses ever for a credit union.
Suncoast Schools FCU, the biggest credit union in Florida, reported another $25 million losses in the fourth quarter to post a $76.7 million loss for 2008.
Wescom Central CU, which has struggled the past two years in the depressed southern California market, had a $21 million fourth quarter loss, creating a loss of $53 million for the year.
North Island Financial CU had a $32.5 million fourth quarter loss and a $50.2 million loss for the year. Jack Lewis, chairman of the North Island board, said yesterday the credit union’s losses were caused by the continuation of the region’s real estate problems. "The numbers you’re seeing are a reflection of the hard-hit real estate market in southern California," Lewis told The Credit Union Journal.
The $1.6 billion credit union set aside an additional $31 million in loan loss reserves in the fourth quarter and cut expenses by about 21%, about $12 million, which included the reduction of 10% of its workforce, about 50 positions, according to Geri Dillingham, North Island’s chief operating officer, who predicted a turn-around this year. "I feel we’re very well positioned for 2009," she said.
Kinecta FCU said it lost $21 million in the fourth quarter to post a $44.3 million loss for the year. Eastern Florida Financial CU reported that losses widened in its fourth quarter to a total of $40.2 million for the year.
Kern Schools FCU reported a $24.3 million loss for 2008 and SchoolsFirst FCU a $2.4 million loss.
Desert Schools FCU, the $3.2 billion Phoenix credit union, fell into the red for the first time with a $7.5 million loss, compared to a $29.5 million net for 2007.
Elsewhere; Texans CU had a $33.5 million loss for the year; GTE FCU reported a $27.5 million loss for the year; Mountain America CU had a $22.5 million loss; The Credit Union of Texas had a $13.2 million loss; Sunmark FCU lost $12.5 million; Allegacy FCU had a $12.1 million loss; Cyprus CU had a loss of $10.2 million; and Pacific Service CU reported a $5.5 million loss for 2008.
