Cards Are Still Cold For Las Vegas CUs
LAS VEGAS – The dire economy here – which is fueling the most bitterly fought Senate race – continues to hold down the state’s credit unions, most of which reported losses again for the third quarter.
“The economy here has stabilized, albeit at a weak level,” said Brad Beal, president of Nevada FCU, which continued to report a loss for the first three quarters of the year, of $3.6 million, though down from last year’s three-quarter loss of $29.6 million.
“We call it less bad,” Beal told Credit Union Journal yesterday.
“Nevada credit unions, at this point, are still dealing with a poor economy,” said Daniel Penrod, financial analyst for the Nevada CU League. He said unemployment remains high in the Silver State, 14.5%, while the depressed housing and gaming markets have yet to stage a turnaround. As a result, Nevada credit unions continue to see rising loan delinquencies and charge-offs. “There isn’t anywhere in Nevada right now that isn’t feeling the pinch.”
The poor economy has fueled the most publicized Senate race in the country, between incumbent Democratic Senate Majority Leader Harry Reid, and tea party candidate Sharron Angle, who is running as a Republican. The credit union lobby is backing Reid, who has built up a relationship with credit unions during his years in Congress. But the tough economy and record spending on behalf of the Republican and independent groups have made the race very close going into the final days of the election.
All over the state credit unions continued to report losses for the third quarter. Clark County CU in Las Vegas reported a $5 million loss for the first three quarters; Boulder Dam CU reported a $2 million loss; Plus CU a $1.8 million loss. Silver State Schools CU, the state’s largest credit union currently under a state supervisory agreement because of last year’s $50.9 million loss, has yet to report its third quarter financials.
Nevada Fed has fought its big losses by cutting about $6 million in expenses, through four branch closings, layoffs and cutbacks on bonuses and salaries. Its efforts to shave $100 million of shares from its deposit base has succeeded in slashing its cost of funds, its NCUSIF insurance premium and raising its net worth ratio, according to Beal, who is not optimistic about a quick recovery. “The economy is still weak. There is no sign of an upturn yet,” he said.