The NCUA announced Wednesday that it terminated its published Letter of Understanding and Agreement, dated June 11, 2013, with the $7 million Valley Pride Federal Credit Union of Plains, Pa.

According to the LUA posted on the NCUA's website, the credit union failed to properly maintain its books and records, lacked internal controls and volunteers failed to fulfill their fiduciary duties. Specifically, Valley Pride was ordered to reconcile accounts at Mid-Atlantic Corporate FCU and Citizen's Bank. Additionally, the order required the credit union to provide the NCUA with a monthly balance sheet and income statement and delinquency report, board meeting minutes.

The LUA was signed by Region 2 Director Jane Walters, Supervisory Examiner Marcus Wander Wall and Principal Examiner Jo-Ann Joyce for the NCUA. Valley Pride board members Thomas Brannigan, Richard Tomko, Kenneth Burke, Karen Burke and Paul Makuch sinced the LUA for the credit union.

Valley Pride reported a $312,110 net loss for 2013, and a $1,995 net loss in March 2014. Significant financial adjustments were reported in the fourth quarter of 2013, when net charge-offs increased from a negative figure to 8.24% of average loans. In the third quarter of 2013, delinquencies were 24.75% of total loans. Following the charge-offs, delinquencies were 8.90% in the fourth quarter. Capital took a hit but is currently about 18%.

The fourth quarter 2013 also saw a spike in operating expenses, to 4.66% of average assets. That number was up from 2.63% in the third quarter and returned back to 2.42% as of March 31, 2014. Valley Pride struggles with income, reporting just 10.5% loans to shares and 0.03% fee income to average assets as of March 31.

When the LUA was signed last year, the credit union was managed by Ken Burke, son of long-time president/CEO William Burke, who died of cancer in 2006. The elder Burke had an active credit union career, serving on the Mid-Atlantic Corporate FCU board of directors since 1986.

According to the NCUA's website, Valley Pride's current manager is Gina Heinbach.

Valley Pride opened in 1979 and has a multiple common bond charter, serving primarily health care companies.