CONCORD, Calif. – State regulators hoped to cauterize the wounds at Cal State 9 CU but were forced to take it over Friday because of accelerating losses, especially in its mortgage portfolio.
The $388.6 million credit union, buried under failed real estate loans, saw its losses go from $9.1 million at mid-year to $45.9 million at the end of the third quarter, sources familiar with the situation told The Credit Union Journal yesterday.
Loan delinquencies, most of its in the real estate portfolio, soared to $26.1 million, or 7.3%, while charge-offs surged to $23.8 million, or 8.9%, at Sept. 30. As a result, the credit union’s net worth plummeted to just 2%, well below federal limits.
NCUA took the credit union under conservatorship and is looking to sell its healthy parts to another credit union.
