PASADENA, Calif. – More big credit unions in California are reporting losses for the first quarter of the year, leading some executives to predict red ink through the rest of 2008.
Included in the most recent reports of first quarter losses are: Travis CU (-$1.1 million); Patelco CU (-$366,000); San Mateo CU (-$355,000); San Diego Metropolitan CU (-$61,000); and two large credit unions that have agreed to mergers in recent weeks: Visterra CU (-$3.6 million), which is combining with Credit Union of Southern California; and California Coast CU (-$485,000), which is merging with First Future CU.
“I think 2008 is going to be worse than 2007, certainly in Southern California,” said Darren Williams, president of Wescom CU, which followed up a $35 million loss last year with a $7.8 million loss for the first quarter. “I don’t think we’ll come out of this until 2009.”
Wescom, as is the case with other area credit unions, continues to move more funds into its allowance for loan losses as loan losses continue to rise, said Williams. The $3.8 billion credit union, he said, had a doubling of charge-offs in the fourth quarter of 2007 and is continuing to see rising charge-offs. “I think we’re all trying to get a handle on it ourselves,” Williams told The Credit Union Journal, of the continued downturn in Southern California.
Other large losses in California reported last week were: North Island CU (-$13.6 million); Kern Schools FCU (-$4.8 million); Kinecta FCU (-$3 million); American First CU (-$2.2 million); Kaiperm FCU (-$2.1 million); Heritage Community FCU (-$1.5 million); E1 Financial CU (-$1.4 million); Alliance FCU (-$1.3 million) and Valley CU (-$900,000).
The largest first quarter loss, a whopping $53 million, was reported by Cal State 9 CU, after a huge, $61.6 million loss the credit union reported for 2007. NCUA currently is accepting offers to buy the remnants of the failed, one-time $420 million credit union.
