Silver State Credit Union to cut salaries 2 percent

Silver State Schools Credit Union, Nevada's largest credit union, confirmed Monday that it will cut salaries of all 226 employees by 2 percent starting in September .

The salary reduction will save Silver State Schools $150,000 yearly, Chief Executive Officer Dave Rhamy said in an email.

"The across-the-board salary cut, effective in September 2011, is in keeping with our ongoing commitment to drive down costs. In 2010, we reduced operating expenses 15 percent," Rhamy said. "We are on track to reduce total operating expense another 10 percent by the end of 2011," Rhamy said. "Although through our past efforts we reported a marginal profit for the first quarter of 2011, we remain wary of the Nevada economy and will continue to prepare for difficult financial times ahead."

The credit union earlier this month said it plans to close two branches later this year. The locations are in Albertsons grocery stores at 575 College Drive in Henderson and 201 S. Stephanie St. in Henderson.

That will leave Silver State with 12 locations in Southern and Northern Nevada. The credit union has $725 million in assets and 64,000 members, many of them teachers.

Silver State earned $90,000 in the first quarter, ending nine consecutive quarters of losses.

Its net worth was $29.7 million or 4.3 percent of total assets at the end of March.

However, the sum included $22 million in a subordinated loan that it received from its deposit insurer, American Share Insurance of Dublin, Ohio.

The credit union insurance company made the loan in February 2010 and extended the loan later last year.

Silver State has $43.7 million in loans that are more than two months past due. It charged off $6.7 million in loans and recovered $860,000 on charged off loans during the fist quarter. Silver State set aside $22.5 million as a reserve for loan losses.

Contact reporter John G. Edwards at jedwards or 702-383-0420.