NCUA Takes Over California Giant Arrowhead Central CU
SAN BERNARDINO, Calif. – NCUA this evening put into conservatorship troubled Arrowhead Central CU, the one-time $1.1 billion credit union which has seen its capital dwindle amid large losses the last few years.
The NCUA takeover comes even as the troubled now-$876 million credit union is preparing to complete a deal this weekend to sell four of its branches to Alaska USA FCU, adding as much as $4 million to its depleted capital. But even that capital infusion will leave the credit union, which had just 3.4% net worth at March 31, with less than 4% net worth, considered by NCUA as under-capitalized.
Arrowhead is the second-biggest conservatorship ever behind the $2.4 billion Eastern Financial Florida CU, which was eventually merged into Space Coast CU. Arrowhead reported losses of $28.6 million for 2008 and losses of $47.1 million for 2009, even while breaking into the black for the first quarter of $2.6 million.
Arrowhead is one of a handful of large California credit unions that have been battered by the state’s real estate bust and recession, forcing several into mergers. NCUA, which has been monitoring Arrowhead as one of its special cases, has been soliciting merger offers for the troubled credit union in recent months.