SACRAMENTO, Calif. – California credit unions in 2007 had one of their worst years since the days of the savings and loan crisis two decades ago, according to a new report issued yesterday by the state’s Department of Financial Institutions.
The state’s 196 credit unions reported a 94% increase in delinquent loans and a 25% rise in foreclosed and repossessed real estate, the DFI reported. With troubled loans mounting, the state’s credit unions boosted their loan loss reserves by 51%.
As a result, credit unions in the Golden State saw their net income plunge by 58% for the year, and their return-on-assets fall to just 0.31% for 2007, from 0.78% for 2006, the lowest in many years.
Credit unions in the $100 million to $500 million range were particularly hard hit by the state’s economic slowdown, with the 56 credit unions in that peer group reporting negative net income of $14.5 million and an ROA of negative 0.43%. The delinquency ratio for that peer group rose to 1.3% at year-end, while the charge off ratio climbed to 0.9%.
The hardest-hit credit unions in the $100 million to $500 million peer group are: Cal State 9 CU, a loss of $61.6 million (-18.18 ROA); Valley CU, with a $5.9 million loss (-2.33 ROA); Sterlent CU, a $4.8 million loss (-4.74 ROA); Alliance CU, a loss of $3 million (-0.97 ROA); San Diego Metropolitan CU, with a $1.4 million loss (-0.50 ROA); Kaiser Lakeside CU, a loss of $1.4 million (-4.34 ROA); Musicians Interguild CU, a $1.4 million loss (-1.69 ROA); California Bear CU, a $1.6 million loss (-1.44 ROA) and E1 Financial CU, a $1.4 million loss (-1.39 ROA).
