LOS ANGELES – Credit unions in California, Nevada, Arizona and Florida continued to post big losses for the fourth quarter, even as some signs began to emerge that the economic slide had started to slow in the four so-called “Sand States.”
"Things are stabilizing. That’s the key in the Sand States, given that they were the hardest hit," said Daniel Penrod, an economic analyst for the California and Nevada Credit Union Leagues.
Still, credit unions from those states were posting big losses for 2009.
In California: Arrowhead Central CU reported a $46.3 million loss for 2009; North Island Financial CU a $40.3 million loss; Kern Schools FCU a $40.6 million loss; Xceed Financial FCU an $18.5 million loss; Visterra CU a $10.5 million loss; Telesis Community CU a $9.7 million loss; and, Kinecta FCU a whopping $71.3 million loss for the year.
Nevada credit unions also are expected to report big losses over the next few days.
The difference between the two states, according to Penrod, is economic indicators in California appear to be trending up. Unemployment seems to have leveled off, home prices are starting to recover and housing sales are picking up. The expiring tax break for first time homebuyers, combined with near-record low rates and falling prices, have boosted mortgage lending for the state’s credit unions.
But Nevada has shown few signs of recovery, he said. "Nevada is still struggling, still trying to find a bottom," he told The Credit Union Journal yesterday. The state actually has seen a net migration of residents because of the high unemployment rate, almost 13%, which has dealt a major blow to the state’s credit unions, many of which are employee-based, he noted.
In Arizona, some of the largest credit unions continued to report red ink. Arizona FCU, which had a whopping $115 million loss for 2008, narrowed its loss to $29.5 million for 2009. Desert Schools FCU, the state’s largest credit union, reported an $81.3 million loss. TruWest FCU reported an $8.2 million loss for the year.
In Florida, some real estate markets also are showing signs of having bottomed out, according to Kathy Chonody, chief financial officer for Orlando’s Fairwinds CU, which went from a $27.7 million loss in 2008 to a $2.4 million net in 2009. Real estate loans are performing better and prices are improving in many of the state’s markets, she said. The trend has the $1.6 billion credit union reserving less for loan losses, allowing it to send more income to its bottom line.
Still, some Florida credit unions continued to report big losses for the year. Suncoast Schools FCU reported a $77 million loss for 2009; GTE FCU a $44 million loss; Grow Financial CU reported an $18.3 million loss; and, Community First Credit Union of Florida an $8.3 million loss. Keys FCU, which has been run under NCUA conservatorship for six months, reported a $4.9 million loss for 2009.
