Failed CU Sees Merger as One Way Out

BOUND BROOK, N.J. – With mounting losses in its consumer loan portfolio, officials of Tri-Linc FCU have decided the only resolution to their financial problems is to merge with a bigger, healthier credit union.
 
The $64 million credit union lost $1.2 million in the third quarter and erased all of its capital. With a resulting net worth ratio of negative 0.2%, the 24-year-old credit union has agreed to merge into FAA Eastern Region FCU in nearby Clark, N.J., according to its president, Eddie Daniels.
 
The merger route is one increasingly being taken by troubled credit unions, with several of the biggest third-quarter losers being combined into healthy credit unions. The list includes: Excelsior CU ($2 million third quarter loss); Green Tree FCU ($700,000 third quarter loss, $2 million three-quarter loss); and Golden Bay CU ($750,000 third quarter loss). At least two other big losers are being combined in assisted mergers by the regulators: Norlarco CU, which lost $2.9 million in the third quarter and $8.3 million for the year; and Huron River Area CU, which lost $200,000 in the quarter and a whopping $59.1 million for the year.