LAS VEGAS – Last week’s disclosure by Silver State Schools CU of a big loss for 2009 serves as continuing evidence that Nevada still is in the throes of the recession and will take some time to pull out.
The one-time $1 billion credit union told members its losses for 2009 were $51 million, which necessitated a cash infusion – reported to be $22 million – from its private deposit insurer, ASI, of Dublin, Ohio. ASI is the insurer for several other troubled Nevada credit unions.
"This capital infusion bolsters our general reserves now, and positions us to continue to help our members as we move forward," Silver State’s President David Rhamy told members in a message on Friday.
The state’s deepening recession has taken just about every one of Nevada’s 28 credit unions into the red. In fact all but one of the state’s 10 largest credit unions reported losses for 2009. That includes ASI-insured Clark County CU (a loss of $25.3 million); Boulder Dam CU (loss of $2.3 million); Plus CU (loss of $1.6 million); and, Frontier Financial CU (loss of $1.4 million); as well as federally insured Nevada FCU (loss of $32 million); Greater Nevada FCU (loss of $10.9 million); Westar FCU (loss of $7.3 million); and, Great Basin FCU (loss of $3.6 million).
Four of the state’s largest credit unions failed late last year: Clearstar Financial CU, Cumorah CU, Community One FCU and Ensign FCU.
Silver State’s Rhamy told his members during 2009 real property values continued to decline and record numbers of members experienced reduced income, forcing the credit union to set aside $59 million for additional loan loss reserves, more than offsetting $8.1 million in net income from operations.
"Nevada is still struggling," said Daniel Penrod, financial analyst for the California/Nevada CU leagues. "Tourism is down, construction is down, jobs are down."
The state’s economy, said Penrod, "is still trying to find a bottom."
"Nevada hasn’t seen as much of a strengthening (as California). Hopefully, we’ll see that in 2010," he stated.
