The NCUA on Monday liquidated the $778,129 Olean Tile Employees FCU of Olean, N.Y. The federal regulator said it made the decision to pull the plug on OTEFCU after determining the credit union was insolvent and had no prospect for restoring viable operations.
The credit union's sponsor organization, the Dal-Tile plant in Olean, closed its doors on Dec. 12 after nearly 100 years in operation, according to the Olean Times Herald. The credit union was located onsite at the plant.
In a Dec. 5 editorial in the paper, tile worker Keri L. Simon wrote, “I'm not real sure exactly why we are closing. Maybe it's New York state taxes. Maybe the package local officials put together wasn't as meaty as what the suits wanted. Maybe it's because we're union. Maybe the other site really makes better tile and it's more cost-effective. Maybe it's because we only have two kilns. Who knows for sure?”
The 550-member institution reported 8.94% net worth as of Sept. 30 and a $939 net profit, according to its financial reports posted on the NCUA's website. However, total loans had fallen from nearly $340,000 in September 2011 to only about $230,000 one year later, resulting in an anemic 32.68% loan-to-share ratio.
Delinquencies were a problem, reaching a peak of 4.34% as of March 31, but had fallen to 1.90% as of Sept. 30. Manager Norma Gold reported reversed charge offs during the first three quarters of the year: -0.83%, -0.88% and -0.62% in the first, second and third quarters respectively. Prior to that, there had been no charge offs since December 2010.
Chartered in 1936, OTEFCU had served the plant's employees for 76 years. It is the 13th federally insured credit union liquidation in 2012.
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