The NCUA said Monday it liquidated the $54.9 million Riverdale Credit Union in Selma, Ala., which posted a net income loss of $14.4 million at the end of the third quarter of 2017.
Riverdale was placed into conservatorship in June 2017 because of unsafe and unsound practices that were not specified by the federal agency. The NCUA’s decision to liquidate Riverdale came after determining it was insolvent and had no prospect for restoring viable operations. The NCUA said the $563 million Jefferson Financial Federal in Metairie, La., immediately assumed Riverdale’s membership, shares, loans and most other assets. Chartered in 1967, Riverdale served 11,577 members.
In addition to losing millions this year, Riverdale’s delinquency loan rate at the end of the third quarter was 14%, much higher than the peer average of about 1%. The Alabama credit union recorded a delinquency loan rate of 13% at the end of the second quarter, sharply higher than the 2.77% delinquency loan rate at the end of the first quarter, according to NCUA financial performance reports.
Riverdale also posted a net worth of -11.05% and an ROAA of -29.98% at the end of the third quarter.
Although the credit union posted net income gains from 2012 to 2016 that ranged from more than $400,000 to more than $600,000, its allowance for loan losses increased gradually from $587,000 in 2012 to more than $1.7 million in 2016, according to NCUA financial performance reports.
Riverdale is the fifth federally-insured credit union to be liquidated in 2017.
