OAKLAND, Calif. –Kaiperm FCU, another California credit union wracked by big losses, is negotiating a merger with Alliant CU, the Chicago credit union giant that was chartered to serve United Airlines employees.
In a letter to members, Kaiperm Chairman Shirley Jones said, "After extensive research and review to determine how best to improve and enhance the financial lives of our members, our board has decided to pursue a merger with the Alliant Credit Union."
Kaiperm is among several bigger California credit unions facing large losses because of troubles in its mortgage portfolio. Faced with rising delinquencies and charge-offs, the $96 million Kaiperm reported a $3.8 million loss for 2007, followed by a $2.1 million loss for the first quarter of 2008, and has lost 8% of its assets since the end of 2006.
Kaiperm had $2.6 million in real estate loans that were delinquent for more than a month for the first quarter, that was up from $2 million in delinquencies at year-end. First quarter charge-offs were up to $1.4 million, compared to just $582,000 for the same period last year.
Large losses have also wracked several other area credit unions in recent months, including Concord-based Cal State 9 CU, which reported more than $110 million losses in mortgage-related losses since the start of 2007; and Sterlent CU, in nearby Pleasanton, which followed a $4.8 million loss for 2007 with a $5.2 million loss for the first quarter of 2008.
San Francisco credit union giant Patelco CU has purchased the remnants of Cal State 9 in a deal with leaving NCUA with the credit unions failed mortgage loans. Patelco is also working on a deal to help rescue Sterlent.
Alliant CU, which was originally the credit union for United Airlines but has since expanded to a community charter, said it was also interested in acquiring Cal State 9 before Patelco submitted the winning bid. The $5.3 billion credit union had net income of $19 million for the first quarter.
