Richmond, Va.-Area Credit Union Issues $5 Million in Subordinated Debt

Henrico Federal Credit Union has borrowed $5 million in subordinated debt, in part to support the Richmond, Va.-area’s credit union’s growth and education programs. It was part of last year’s increase of $560.9 million, or 16%, in subordinated debt among the 153 credit unions with subordinated debt.

National Cooperative Bank (NCB) of Arlington announced Monday that it lent $3 million of the the subordinated debt in the fourth quarter to the low-income-designated credit union ($432.7 million in assets, 30,614 members as of Dec. 31). The remaining $2 million came from another source not identified by NCB.

The loans represented Henrico FCU’s first subordinated debt, ending the year with $5 million.

A news release from the non-profit NCB said the subordinated debt was intended to be used to support the credit union’s growth and expansion of lending and “innovative financial programs.”

Henrico FCU President/CEO Chris Williams said NCB’s loan is being used to “assist the credit union in achieving several key initiatives designed to strengthen local communities and promote financial well-being for all.”

Henrico FCU recently established a Financial Empowerment Center geared towards helping low- and moderate-income adult learners achieve financial peace of mind. The credit union has partnered with Henrico County Public Schools to establish a financial empowerment center within their new 48,500-square-foot adult education center.

“NCB is proud to work with Henrico Federal Credit Union to support their mission of community empowerment by expanding financial resources to their local communities,” NCB SVP Ann Fedorchak said.

NCUA rules that went into effect in January 2022 have expanded credit union access to regulatory capital by permitting credit unions with at least $500 million in assets and new credit unions to issue subordinated debt. The NCUA had already allowed low-income designated credit unions, regardless of their asset size, to issue subordinated debt.

NCUA data shows 153 of the nation’s 4,702 credit unions ended the year with $3.97 billion in subordinated debt. Twenty-eight credit unions increased their subordinated debt by $599.1 million last year, while 30 credit unions decreased their debt by $38.2 million.

Besides Henrico, the 12 other credit unions that increased their subordinated debt by at least $5 million last year were:

1. Park Federal Credit Union of Louisville, Ky. ($1.3 billion in assets, 77,089 members), which increased its subordinated debt by $122.1 million to end the year at $128.3 million.

2. Global Federal Credit Union of Anchorage, Alaska ($11.9 billion in assets, 754,160 members), which issued its first subordinated debt, ending the year with $110 million.

3. GreenState Credit Union of North Liberty, Iowa ($11.4 billion in assets, 451,291 members), which increased its subordinated debt by $100 million to end the year at $160 million.

4. Idaho Central Credit Union of Chubbuck ($11 billion in assets, 610,882 members), which issued its first subordinated debt, ending the year with $79 million.

5. Neighbors Federal Credit Union of Baton Rouge, La. ($1.2 billion in assets, 81,637 members), which increased its subordinated debt by $35 million to end the year at $43 million.

6. Listerhill Credit Union of Sheffield, Ala. ($1.4 billion in assets, 94,223 members), which increased its subordinated debt by $31 million, including $5 million from NCB, to end the year at $40 million.

7. TruStone Financial Credit Union of Plymouth, Minn. ($5 billion in assets, 214,200 members), which issued its first subordinated debt, ending the year with $25 million.

8. Greylock Federal Credit Union of Pittsfield, Mass. ($1.6 billion in assets, 101,343 members), which issued its first subordinated debt, ending the year with $23 million.

9. Notre Dame Federal Credit Union of Notre Dame, Ind. ($1.1 billion in assets, 64,582 members), which increased its subordinated debt by $15.6 million, including $5 million from NCB, to end the year at $27.6 million.

10. Blue Federal Credit Union of Cheyenne, Wyo. ($1.9 billion in assets, 119,777 members), which issued its first subordinated debt, ending the year with $15 million.

11. Credit Union 1 of Rantoul, Ill. ($1.7 billion in assets, 125,000 members), which issued its first subordinated debt, ending the year with $10.4 million.

12. Water and Power Community Credit Union of Los Angeles ($971.9 million in assets, 44,861 members), which issued its first subordinated debt, ending the year with $10 million.