Among the NCUA’s approved 25 mergers in November, four credit unions were consolidated because of their poor financial condition, including a Los Angeles faith-based cooperative that posted delinquency rates ranging from zero to 100% for more than five years.
The $17,463 Zion Hill Baptist Church Federal Credit union in Los Angeles posted a delinquent loan rate of 0.41% in 2012, and zero delinquent loans in 2013 and 2014, according to NCUA financial performance reports. That delinquency loan rate, however, shot up to 44% in 2015 and 100% in 2016.
The credit union chartered in 1969, which served only 140 members, also posted a 100% delinquency loan rate at the end of the first and second quarters in 2017 and zero delinquencies at the end of the third quarter.
Zion Hill Baptist Church FCU, which also posted net income losses since 2012, was approved to merge into the $4.1 billion Kinecta Federal Credit Union in Manhattan Beach, Calif., according to the NCUA Insurance Report of Activity for November.
Another faith-based credit union in Dallas, Texas, the $612,145 Good Street Baptist Church Federal Credit Union, was approved to consolidate because of its poor financial condition, according to the NCUA.
Chartered in 1957, this credit union loan also had loan delinquencies issues.
The Good Street Baptist Church FCU posted increasing delinquency loan rates from 4.81% in 2012 to more than 20% in 2016, according to NCUA financial performance reports. In 2017, the credit union’s delinquency loan rate was 19% in the first quarter, 18% in the second quarter and 20% in the third quarter.
Good Street Baptist Church posted net income losses for more than five years and received NCUA approval to merge with the $633 million Neighborhood Credit Union in Dallas.
Despite posting positive growth trends — with a few exceptions — in all key metrics in net worth, market share, loans, assets, investments and membership, including net income gains over the last five years, the NCUA approved the $73.5 million Tuscaloosa Credit Union to merge into the $776 million Alabama Credit Union in Tuscaloosa.
Tuscaloosa CU finished the third quarter in 2017 with a net worth of 9.98%, lower than peer average of 11.53% and a ROAA of 0.53%, higher than peer average of 0.46%, according to NCUA financial performance report.
At the end of 2016, the $40.3 million Classic Credit Union in Amelia, Ohio, posted a net income loss of $2.2 million, though it recorded net income gains in the three quarters of 2017, including a $540,871 net income gain at the end of the third quarter. And from 2012 to 2015, the credit union produced positive net income gains, according to NCUA financial performance reports.
Although the credit union’s total loans increased from $20 million in 2012 to $28 million in 2016, its total loans declined to $23 million by the end of the third quarter in 2017.
Classic CU was approved to consolidate into the $729 million Superior Credit Union in Lima.
Because of poor management, the conserved Citizens Community Credit Union in Devils Lake, N.D., which lost more than $8 million this year, was approved to merge with North Dakota’s largest credit union, the $611 First Community CU in Jamestown. The NCUA placed the $185 million Citizens Community CU into conservatorship in June for unspecified safety and soundness issues.
Because of its “inability to obtain officials,” the $1.1 million City of McKeesport Employees Federal Credit Union was approved to merge into the $43.2 million Parkview Community Federal Credit Union in McKeesport, Pa.
After the Eaton Corp closed its plant last year in Spencer, Iowa and laid off more than 200 employees last year, the $1.4 million Eaton Employees Credit Union was approved to merge into the $124 million First Federal Credit Union in Hiawatha, Iowa. The Eaton plant, which manufactured hydraulic pumps and motors for agricultural equipment, was once the largest employer in Spencer.
In 1990, Eaton Employees CU served 466 members. By the end of the third quarter of 2017, the credit union served only 298 members.
Because of its “lack of sponsor support,” the $4.4 million MECU in Atlanta, Ga., was approved to merge with the $1.2 billion LGE Community Credit Union in Marietta, Ga.
MECU was founded in 1928 by a group of manufacturing employees at the Atlanta Paper Co.
The remaining 17 credit unions were approved to merge by the NCUA for “expanded services.” Among these credit unions, all but one managed assets of less than $50 million.
The $64.4 million Piedmont Credit Union in Danville Va., was given the green light to consolidate with the $317 million Valleystar Credit Union in Martinsville, Va.
The number of mergers approved by the NCUA in November was higher than the 18 mergers approved by the federal agency in November 2016.
