TAMPA, Fla. – Credit unions in this hard-hit center of Florida’s Gulf Coast are slashing dividend rates, shuttering branches and raising loan rates conserve capital and to stay afloat in one of the worst economies in the country.
“How much longer can I go on running down rates, raising fees and reducing services,” said Thomas Randle, president of Sarasota Coastal CU, the one-time $240 million credit union forced into a merger with Key Largo’s Achieva FCU by growing troubles on its loan portfolio and the resulting diminished capital. “It’s just a bloodbath on the southwest coast,” said Randle.
“I don’t think things are getting any better,” said William DeMare, president of Tampa’s Bay Gulf FCU, struggling under the area’s 13% unemployment. “We’re seeing a lot of people on unemployment, running out of unemployment, just picking up leaving; leaving their home, leaving the state,” said DeMare, who reported a $375,000 loss for the third quarter, and a $913,389 loss for the first three quarters of the year.
Bay Gulf members are bringing in their vehicles by the dozens for voluntary repossessions. “People are just saying, ‘I don’t have any more money.’ People are dropping their insurance, they’re dropping their homeowners insurance, cutting corners wherever they can,” DeMare told The Credit Union Journal yesterday. “There’s a whole group of people who just stopped looking for jobs.”
Other area credit unions have been battered too. Tampa-based GTE FCU, which reported a $25.6 million operating loss at mid-year, is shutting down as many as 12 branches. The state’s biggest credit union, Suncoast Schools FCU, also based in Tampa, reported a $20.7 million operating loss at mid-year.
Credit unions throughout Florida, one of the four ‘Sand States’ --along with California, Nevada and Arizona–crushed by the real estate bust, are reporting similar problems.
Florida Telco FCU reported a three-quarter loss of $4.3 million. Community First CU of Florida reported a three-quarter loss of $6.1 million. Keys FCU, taken under conservatorship by NCUA three weeks ago, had a $4.4 million three-quarter loss. Tropical Financial FCU had a $4.3 million loss for the first nine months. McCoy FCU had a $2.4 million three-quarter loss. BrightStar FCU reported a $1.2 million loss through the first three quarters of the year.
The story is the same with the area’s banks. Three of them were taken over by the FDIC just last Friday; Partners Bank and Hillcrest Bank, both in Naples, and Flagship National Bank in Bradenton.
Sarasota Coastal’s Randle, lamented the continuing decline in the Gulf Coast’s real estate market, where home prices have plunged 50% to 60% and the bottom-feeders, the “scalpers,” are driving down foreclosure prices and the rest of the market even further. “The next wave here is likely to be commercial real estate,” he worried.
Randle, who has headed the one-time teachers’ credit union for 20 years, lamented the loss of independence for his 56-year-old credit union. “It’s like losing a loved one,” he said.
