With the failure of the $147 million Cumorah Credit Union fresh on their minds, Nevada credit union CEOs were more than skittish last week about forecasting any quick turnaround in loan losses. Adding to the unease was the announcement by the state's second largest credit union, the $783 million Nevada Federal Credit Union of Las Vegas, detailing new job cuts.
"It's not pleasant, but it's the right thing to do," explained Brad Beal, CEO of Nevada FCU in announcing the elimination of 30 jobs and the restructuring of several others. The credit union's payroll stands at 270.
The CU serves 86,000 members in Las Vegas, Pahrump and Reno and like nearly all other major credit unions in the state, its most recent financials are covered in red ink.
In a statement, Nevada FCU said it was acting "in response to the further deterioration of the local economy."
CU officials said there are no current plans to shutter any of Nevada FCU's 23 statewide branches, "but we are looking at all expenses." Its capital position stands at 9.5%.
Wayne Tew, president/CEO of the rival $580 million Clark County CU, said his headcount remains at 97, "and there are no immediate plans to reduce that number" or close any of its six branches.
"But nobody, not even the president of the United States, can say where this is going," lamented Tew who saw one recent positive sign in fewer bad car loans. The Las Vegas CU has been aggressive on loan set asides, and "we're holding our own on loan modifications," he said. Clark County lost $20 million through the first nine months of this year and has a net worth ratio of 7.40%.
"As is the case for all Nevada-based financial institutions, our credit unions continue to deal with the effects of the extremely difficult economic conditions we have endured during the last two years," said Wally Murray, president/CEO of Greater Nevada Credit Union.
"It's not surprising that the combination of residential real estate values that have fallen more than 60% in our metropolitan areas and a statewide unemployment rate that has nearly tripled during that time have resulted in significant earnings pressures for our consumer-based cooperatives," he added.
Murray went on to say that he hoped that credit unions will continue seeking appropriate opportunities to collaborate with others throughout the movement.
According to regulatory statistics, the state's largest credit union, the $899 million Silver State Schools, had a net loss of $36 million year to date and a 4.29% net worth. Its top officials did not return calls seeking comment by press time.
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