NCUA Releases a Georgia Credit Union From Conservatorship

The $42 million Southern Pine Credit Union in Valdosta, Ga., will be released from conservatorship on March 17, the NCUA said Tuesday.

On June 11, 2020, in consultation with the Georgia Department of Banking and Finance, the federal agency conserved the credit union because of “unsafe and unsound practices” not specified by the NCUA at that time.

However, NCUA financial performance reports showed that at the end of 2020’s second quarter on June 30, Southern Pine recorded a loss of $6,019,746. What’s more, second quarter financials also showed the credit union recorded $6,116,346 in its line item of “other operating expenses.”  That “other operating expenses” number climbed to $6,349,356 at the end of the third quarter and increased again in the fourth quarter to $6,561,289.

At the end of the third and fourth quarters of last year, Southern Pine posted losses of $5,940,675 and $5,844,935, respectively.

During 2021, the credit union posted $211,476 in its line item of “other operating expenses” in the first quarter, $389,242 in the second quarter, $553,210 in the third quarter and $684,589 in the fourth quarter, according to NCUA financial performance reports. In previous years, from 2017 to 2019, Southern Pine’s operating expenses averaged more than $300,000.

The credit union did not post any financial losses in 2021 and finished the year with a net gain of $419,611, NCUA financial performance reports showed. While its net worth was 7.64% at the end of 2021, loans and membership each dropped by nearly 13%, according to NCUA financial performance reports.

An NCUA spokesperson said the federal agency is unable to comment because this is supervisory information. A spokesperson for Georgia’s Department of Banking and Finance could not respond to CU Times questions because the information regarding the conservatorship is confidential and cannot be disclosed.

Since last June, Heath Dawson has been serving as Southern Pine’s president/CEO. The credit union also employs an operation specialist, loan officer, accounting manager and two member service representatives.

The credit union’s staff operates one branch and serves 1,434 members.

“The recovery of Southern Pine resulted from the coordinated efforts by the NCUA, the credit union’s new management team, and the Georgia Department of Banking and Finance to carefully and consciously mitigate risks, enhance lending controls, revive operations and increase efficiency,” NCUA Board Chair Todd Harper said in a prepared statement. “Through these joint efforts, we preserved Southern Pine and have now put it back in the hands of its members. That’s a win for everyone involved, but especially for the Southern Pine members who now have a stronger credit union.”

Southern Pine is the second federally insured credit union to emerge from NCUA conservatorship this year. On Feb. 23, federal and state regulators released the $4.1 billion Municipal Credit Union in New York from conservatorship.