LAS VEGAS – Silver State Schools CU, the nation’s largest privately insured credit union that has struggled with big losses the past two years, reported a slight profit of $90,000 yesterday for its fiscal first quarter.
The first quarter net comes after losses of $72 million in 2009 and 2011 erased almost all net worth for the one-time $1 billion credit union, Nevada’s largest.
Still, even as Silver State was claiming net worth of $31.3 million, or a 4.31% ratio at March 31, the vats majority of that, or $22 million, is from an emergency loan provided by its private deposit insurer, ASI Inc., of Ohio.
David Rhamy, president of the now-$725 million credit union, asserted that other financial trends are cause for optimism. In the first quarter Silver State’s loan delinquencies and estimates of future charge-offs were favorable. Reportable delinquent loans decreased to $43.7 million as of March 31, from $62.7 million a year earlier. As a result, the loan loss provision for the first quarter of 2011 was $3.4 million versus $11.1 million for the same period of 2010.
“We are happy to report the transition from relatively large losses to modest gains, which signals that the credit union is on its way to recovery,” said Rhamy.
The troubles at Silver State are the biggest challenge ever for ASI, the lone survivor of a one-time network of two dozen private insurers for credit unions. The emergency loan for Silver State and losses related to another large Nevada privately insured credit union, Cumorah CU, forced ASI to assess its first premium ever in 2009, then follow it with another premium last year. Several other ASI-insured credit unions have also battled big losses the past two years.
