LOS ANGELES – Big credit unions in the four “Sand States,” plus one (Utah), are continuing to report big losses, even as a glimmer of economic recovery is starting to emerge nationwide.
“We’re not in the recovery mode just yet, though we’re seeing some positive signs,” said Daniel Penrod, financial analyst for the California/Nevada credit union leagues. He noted an apparent stabilization of the jobs market in the two Sand States and strong deposit growth among credit unions.
“Things have turned around in our market, that’s pretty clear,” said Teresa Halleck, president of The Golden 1 CU, a $7.8 billion credit union giant that eked out a $192,000 net for the first quarter after a $23.1 million loss for 2009. “I just don’t see a rebound for the Sacramento area.” She noted the continuing high jobless numbers, slow construction starts and the state’s budget woes that is translating into more job losses and reductions in pay and retirement contributions for her members.
Even as some credit unions began to break into the black in the first quarter, others continued to report red ink: Kinecta FCU, which had a $71.3 million 2009 loss, reported a $2.7 million loss for the first quarter; Wescom Central CU, which had a $93.6 million loss for 2009, had a $3.9 million loss last quarter; Kern Schools FCU, a $40.6 million 2009 loss, to a $2.5 million loss; Meriwest CU, a $33.4 million loss and a $4.9 million loss; USA FCU, a $16.8 million loss to a $4.9 million first quarter loss; American First FCU a $1.7 million first quarter loss.
Nevada FCU, with a $32 million 2009 loss, had a $1.1 million first quarter loss; Greater Nevada FCU, a $761,000 first quarter loss; Weststar FCU, a $1.4 million first quarter loss; America First CU (Utah) a $15.9 million 2009 loss, had a $5.4 million loss for the quarter; Deseret First FCU, a $6.8 million 2009 loss, had a $3.3 million loss for the quarter.
In Florida, where the real estate market has slumped as much as any in the country, a recovery is not yet in sight. Fairwinds CU reported a $3 million loss for the first quarter; Tropical Financial CU a $2.7 million loss; Florida Telco FCU a $1.2 million loss; Space Coast CU a $760,000 loss and VyStar CU a $290,000 loss.
Tom Dorety, president of Suncoast Schools FCU, which reported a $13.2 million loss for the first quarter, predicted “more of the same” for the pitiable real estate market for the near future, even as his credit union’s numbers are moving in the right direction. “We’re still dragging in the market,” he said, explaining that Florida is lagging the rest of the country, and southwest Florida, where the $5.3 billion credit union has a big mortgage exposure, is behind the rest of the state’s troubled real estate market.
But first quarter financials often can be deceiving, according to analysts, because generally more loans are charged off and more funds move to loan loss reserves to cover the charge-offs in the second half of the year. In addition, most credit unions have yet to take a charge for the corporate credit union bailout that NCUA plans to assess either in the second or third quarter of the year.
