The NCUA on Friday assumed control of service and operations of the $31.1 million PEF Federal Credit Union of Highland Heights, Ohio, according to a release from the federal regulator.
During the conservatorship, the NCUA said it will work to resolve issues affecting the suburban Cleveland institution's safety and soundness.
According to the 2,974-member credit union's most recent financial performance reports, the top safety and soundness issue is loan quality. As of March 31, the community-chartered credit union reported 10.59% delinquent loans and 6.17% charge offs.
Net worth plummeted from 8.12% as of March 31, 2012 to -0.27% as of Dec. 31. The credit union sold investments during the first quarter to raise net worth back to 4.27% as of March 31.
PEF's real estate loan portfolio has shrunk from nearly $10 million during the first quarter 2012 to $7.7 million one year later. The credit union was featured in a 2010 Credit Union Times article about small credit unions offering mortgage loans.
According to the credit union's website, PEFFCU was chartered in 1957 and originally served the employees of Picker X-Ray Corp. It converted to a community charter in 2006.
According to an online chronicle of Cleveland history maintained by Case Western Reserve University, the company employed as many as 1,600 people in northern Ohio in the late 1990s.
After experiencing a series of buyouts, the company is now named Marconi Medical Systems and is owned by the Netherlands-based Philips Electronics.
The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members' interests, or protect the Share Insurance Fund.
PEFFCU is the third federally insured credit union placed into conservatorship during 2013.
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