Three major credit unions report losses

The recession continues to sap the strength of Southern Nevada credit unions with four of the major credit unions reporting second- quarter losses.

"It's not getting better, but it's not getting worse," said Wayne Tew, chief executive officer of Clark County Credit Union, which serves 36,000 members.

Brad Beal, chief executive of Nevada Federal Credit Union said, "We're hoping that the local economy has stabilized."

And William Ferrence, manager of Boulder Dam Credit Union, said, "I honestly don't see a change (in the area economy)."

However, John Drake, chief executive officer of SWG Federal Credit Union, said the credit union sector in Nevada and nationally are "at a crossroads," burdened with financial woes because of the economy and increased regulations resulting from the financial reform bill and national health care.

Drake worries that some credit unions will be unable to continue as going concerns.

Clark County, Nevada Federal, Silver State Schools Credit Union and Boulder Dam Credit Union lost money in the second quarter.

Silver State, which has 76,000 members, reduced its second-quarter loss to $4.9 million from $8.5 million in the first quarter.

"We're making steady progress in our financial recovery; second-quarter results cut the loss from the first quarter in half," Silver State CEO Dave Rhamy said in an e-mail.

The credit union, which relies on private insurance for deposits, has the lowest net worth ratio of the area credit unions at 4.9 percent. More than half of its $38.6 million in net worth is a loan from American Share Insurance, which backs its deposits.

Silver State continues to struggle with delinquent car loans, which were made through dealers, and home-mortgage loans. The credit union has reduced its portfolio of new-car loans to $114.3 million from $131.5 million three months earlier.

Rhamy said the credit union is working closely with the Nevada Financial Institutions Division and the insurance company, "and the earnings recovery plans are on track."

Nevada Federal Credit Union reported a $1.7 million loss, up from $1.1 million in the first quarter. It is well capitalized with net worth representing 9.7 percent of its assets.

Beal noted a "significant improvement" in its loan portfolio. "Nevertheless, a number of our members continue to feel the effects of the recession, and we're working to help them," he said. Nevada Federal has 84,000 members.

Losses at Clark County Credit Union ballooned to $3.4 million in the second quarter, from $726,000 in the first quarter.

Tew attributed most of the loss to the credit union's move to a $3 million addition to reserves for potential loan losses.

Losses for the first six months of the year are half the total for the first six months last year, Tew said. Delinquent loans dropped by half since the beginning of the year.

Clark County is undercapitalized with net worth equal to 6.4 percent of its assets

Boulder Dam Credit Union, which serves 22,000 members with ties to Boulder City, trimmed its losses to $116,000 from $458,000 in the first quarter. Its net worth is 9.1 percent of assets.

The credit union boosted its loan-loss reserve during the first half of the year, Ferrence said. The financial institution has about half of its assets in Treasuries, federal agency debt and corporate bonds, which are yielding a composite 1 percent. That reduces profits, but Ferrence figures the money is not at risk.

Results for smaller credit unions were mixed.

SWG Federal slashed its losses to $11,000 in the second quarter from $84,000 in the first quarter. Its net worth is 10.3 percent of assets.

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


Privately insured
Credit UnionAssetsSecond-quarter
Net worth
(% of assets)
Silver State Schools$791.7 million-$4.9 million-$8.5 million4.9
Clark County519.2 million-3.4 million-726,0006.4
Boulder Dam490.3 million-116,000-458,0009.1
Plus Credit Union105.5 million-657,000-317,70611.1
Federally Insured
Credit UnionAssetsSecond-quarter
Net worth
(% of assets)
Nevada Federal$718.3 million-$1.7 million-$1.1 million9.7
WestStar142.4 million-230,000-1.4 million9.2
Moapa Valley76.1 million-3,000-437,00011.6
Sonepco60.1 million+15,000+54,0007.2
SWG21 million-11,000-84,00010.3
Stage Employees14.9 million+22,000-179,0005.9
Las Vegas Up Employees4.2 million-44,000-9,00038.6

SOURCES: American Share Insurance and National Credit Union Administration