Strong Quarter, But CUs Posting Low Avg. ROAs
ALEXANDRIA, Va.-The low-rate environment for loans and interest-earning assets maintained its grip on credit unions in the first quarter, squeezing profitability to another lackluster return-on-average assets (ROA) of just 0.92%. That's the same as in 2004 and near five-year lows. Otherwise credit unions had a strong quarter, according to NCUA, with the average loan delinquency ratio dipping to a three-year low of just 0.64%, and the charge-off ratio declining to 0.5%.
Shares grew by a healthy 2.5% in the quarter, while loans expanded by 1.1% and membership by 0.6%.
Kenealy Is Terminated As SunCorp's CEO
WESTMINSTER, Colo.- Suncorp Corporate CU President Eric Kenealy has been terminated by the board and a national search for a new president has been launched, according to Darin Moody, chairman of Suncorp and CEO of Utah First CU in Salt Lake City. Mark Schieffer, the corporate's CIO, has been appointed to serve as interim president. Schieffer has also worked at ALM First, a subsidiary of EasCorp, and at Southwest Corporate prior to joining Suncorp last October.
In announcing Kenealy's dismissal, Moody said he could not discuss the reasons for the abrupt termination but added that to his knowledge there has been no fraud or misappropriation of funds. "This is a private issue between Eric and the board," he added.
Stock Reserved For Insiders
ALBANY, Ga.-HeritageBank of the South, known until January 2001 as AGE FCU, has begun the process of going public with the sale of as much as $30 million in stock to depositors (see related story, below, right). But unlike in past offerings of converted credit unions, former members of the credit union will not be given priority to buy HeritageBank stock with priority being extended to depositors as of Dec. 31, 2003, after the ex-credit union had converted to a mutual thrift.
But the credit union-convert has reserved stock for directors and officers, who plan to buy 155,500 of the shares in the newly public bank holding company. Under the public offering, the bank is selling 30% of a mutual holding company called Heritage Financial Group, with plans to sell the rest of the company in a two-step offering later on. AGE FCU was chartered in 1955 to serve servicemen at the Marine Base in Albany, Ga.
DNA Leads To Robber
VICTORVILLE, Calif.- A second of three violent robbers who held up Victor Valley FCU in August 2003 was charged with the crime earlier this month after he was identified through the state's new DNA database. DNA taken from Jimmy Willis while he was in jail on another robbery charge was matched to DNA recovered at the credit union after the robbery, leading authorities to charge Willis with the credit union robbery, the first time they have solved a case using the state's new DNA database.
Another of the robbers, Johnnie Rice, was charged last winter after his DNA, already stored in the state database, was matched with that of DNA scraped from saliva on a ski mask left in the getaway car.
Board Votes To Liquidate CU
WATERBURY, Conn.-About 4,000 members of Need Action CU will have to wait weeks before getting access to their savings after the board of the $2-million credit union voted to close down last week, one of just a handful of voluntary liquidations this year. A sign posted on the credit union's door last week said no withdrawals could be made but loan payments were still expected on time. Members were meeting to decide whether to approve the board's action.
The Credit Union Journal's On Deadline coverage is sponsored by Liberty. For info: www.libertysite.com.