LAS VEGAS – Troubled Silver State Schools CU, one of several Las Vegas credit unions reporting big losses last year, cut its red ink for the first quarter to $8.5 million, from almost $51 million for 2009.
The one-time billion-dollar credit union, which was forced to borrow $22 million from private deposit insurer ASI last year, announced two weeks ago it is shuttering five branches as part of a cost-cutting move to help it return to profitability.
Several other Las Vegas-area credit unions also are reporting smaller losses, with Nevada FCU reporting a $1.1 million loss after a $32 million loss last year; Clark County CU a $726,000 first quarter loss after a $25.3 million 2009 loss; Boulder Dam CU a $458,000 loss after a $2.3 million loss last year. Carson City-based Greater Nevada FCU had a $762,000 loss for the quarter after a $10.9 million loss for 2009.
But experts are warning that the state’s credit unions, battered by one of the worst real estate economies in the country, are not out of the woods yet. “Nevada is struggling on many fronts,” said Daniel Penrod, economic analyst for the California/Nevada CU Leagues, who pointed out an ongoing decline in tourism, the gaming industry, real estate prices and jobs.
Other observers also noted that first quarter financials for credit unions typically are better than later in the year, when credit unions tend to charge off more loans and move more funds to allowance for loan losses to provide for the charge-offs.
In the case of Silver State Schools, Nevada’s largest credit union, its first quarter financials showed $11.1 million set aside in allowance for loan losses, compared to $59 million at year-end 2009. Over the past year assets for the credit union have declined to $820 million, from a high of just over $1 billion.
