The NCUA liquidated the $14 million Mayfair Federal Credit Union in Philadelphia on Monday.
Mayfair FCU, the fourth liquidation in 2014, was placed into conservatorship by the NCUA last year to protect its financial stability.
“NCUA made the subsequent decision to liquidate and discontinue operations after determining the Mayfair was insolvent with no prospect for restoring viable operations,” the agency said in a press release on Monday.
Mayfair FCU, chartered in 1936, had 1,519 members at the time of liquidation, according to the credit union's most recent call report.
The $623 million Freedom Credit Union in Warminster, Pa. immediately assumed Mayfair's members and deposits, a portion of its loan portfolio and other assets. Freedom is a federally insured, state-chartered credit union, which serves more than 60,000 members.
Although Mayfair FCU reported 13.31% net worth as of Dec. 31, 2013, other financial ratios reported to the NCUA indicated the credit union faced financial difficulties.
Delinquent loans to total loans increased significantly over the last year, from 6.06% in December 2012 to 24.80% one year later. However, net-charge offs remained around 1% or less during that same period.
Additionally, the credit union did not increase its allowance for loan losses as delinquencies increased.
The credit union's high loan concentration intensified its loan delinquency issues. As of year-end 2013, Mayfair's loan-to-share ratio was 87.62%, down from 92.84% at year-end 2012 and a high of nearly 95% as of March 31, 2013.
Salary and benefits paid to full time employees more than doubled during the fourth quarter of 2013, from less than $50,000 in previous quarters to $111,106 as of Dec. 31.
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