Silver State Schools Credit Union posts fourth consecutive profitable quarter

Silver State Schools Credit Union, which at the height of the recession in 2010 received a $22 million capital infusion, continues to make progress toward full recovery as it posted its fourth consecutive quarterly profit.

The Las Vegas-based credit union reported net income of $1.18 million in the first quarter, compared with a loss of $3.5 million in the same period last year. Loan delinquencies continued to decline, to $17.7 million in the first quarter from $37.1 million last year.

Although the credit union’s provision for loan losses in the first quarter increased to $2.1 million from $1.5 million at the end of 2012, the reduction in loan losses is down dramatically from the $6.8 million in the first quarter of last year.

“This year has begun well,” said Andy Hunter, CEO of the credit union. “We are pleased to report out fourth consecutive quarter of positive earnings. In those quarters we have generated approximately $4 million in cumulative net income.”

Hunter acknowledged the Las Vegas economy is still recovering and poses some risk, but the credit union continues “to build net worth and liquidity.” Hunter, an industry veteran from Northern California, replaced longtime Silver State Schools CEO Dave Rhamy in July 2011.

The credit union posted more than $84.14 million in losses from the first quarter of 2009 through the first quarter of 2012. Silver State Schools returned to profitability in the second quarter of 2012, earning more than $4.6 million since June 30.

As of March 31, the 56,659-member credit union reported assets of $644 million, deposits of $613 million, and loans of $429 million, with a regulatory net worth of $27.9 million.

“As we regain our financial footing, we are optimistic that our progress will continue,” Hunter said.

At one time, Silver State Schools was Nevada’s largest credit union with 21 branches and $1 billion in assets. The credit union fell upon hard times when the Las Vegas economy tumbled into recession and the housing market crashed.

In February 2010, Dublin, Ohio-based American Share Insurance Inc., which solely insures the credit union’s deposits, gave the financial institution $22 million. Silver State Schools has not begun to repay the note from American Share Insurance.

“The capital assistance provided by ASI to the credit union is regarded as part of Silver State Schools Credit Union’s regulatory net worth, and any repayment is contingent upon the credit union’s ongoing financial recovery,” Silver State Schools said in a statement Monday. “Once (the credit union) sustains 6 percent regulatory net worth, then a portion of the capital assistance may be repaid.”

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.