NCUA places Southern Pine Credit Union into conservatorship

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The National Credit Union Administration on Thursday placed Southern Pine Credit Union of Valdosta, Ga., into conservatorship.

The regulator’s decision was due to “unsafe and unsound practices” at the $46 million-asset credit union. The agency did not immediately respond to a request for comment on what those practices were.

NCUA call report data shows that Southern Pine CU had a net loss of $77,577 in the first quarter, after it reported a $78,336 profit for the year-earlier quarter.

The credit union's charge-offs were up nearly threefold year-over-year, to $29,712, at the end of Q1, driven primarily by an increase in issues with used car loans. Call report data shows just 21 reportable delinquent loans as of Q1, down from 36 one year prior. But the total amount of reportable delinquencies dropped from more than $622,000 to just over $244,000 as of Q1, thanks in part to a decline in delinquencies on adjustable-rate mortgages.

Southern Pine is the first credit union to be conserved since the coronavirus pandemic and recession hit. Its conservatorship arrives on the heels of the liquidation of IBEW Local 712 Federal Credit Union, a $7.7 million-asset institution in Beaver, Pa.

Conservatorship allows the regulator to assume control of a credit union and address any problems related to the its operations. Members are still able to conduct business at the credit union. Some credit unions that entered conservatorship in the wake of the Great Recession were able to turn the ship around and return to profitability, but in many cases conservatorship is the first step before liquidation or an assisted merger.

In 2019, Municipal Credit Union and Mid East Tennessee Community Credit Union were placed under conservatorship by the credit union regulator.

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NCUA Liquidity Compliance Georgia Revenue and expenses Earnings