Trouble mounts in 2009 for credit unions

All Southern Nevada-based credit unions lost money in 2009 and in the fourth quarter as the recession continued to wreak havoc on member finances, the latest reports show.

Southern Nevada credit unions lost about $120 million last year as more and more borrowers fell behind on loan payments. The big three -- Silver State Schools Credit Union, Nevada Federal Credit Union and Clark County Credit Union -- accounted for $108 million of the losses.

Silver State Schools Credit Union, the state's largest credit union with $819.7 million in assets and 80,000 members, lost $50.9 million last year. That includes a loss of $15 million in the fourth quarter.

The institution was undercapitalized with net worth at 2.8 percent at year-end, according to a report posted by American Share Insurance, the Ohio-based company that insures its deposits.

However, American Share made an extraordinary $22 million loan to Silver State in February. Silver State Chief Executive Dave Rhamy said the loan is subordinated debt and is treated as capital. That will almost double Silver State's net worth to $45 million.

Silver State reported $60.6 million in loans more than two months past due, excluding $26.5 million in loans past due one month. The credit union set aside $20.3 million in allowances for loan losses, but that's well below the industry standard of reserving one or two times the amount of delinquent loans, according to analysts.

The financial institution charged off $44.8 million in loan losses and recovered less than $1 million from loan charge-offs.

Silver State's financial report was first posted on the American Share Web site this week, though it was showing reports for other Southern Nevada credit unions a month earlier. Silver State filed its financial information as required with state and federal regulators before it was posted on the insurance company Web site, according to a source.

Clark County Credit Union, another privately insured credit union, reported $25.3 million in losses last year, including about $5 million in the fourth quarter. Its net worth or capital ratio was 6.7 percent and it reported that 5.1 percent of its loans were delinquent.

Nevada Federal Credit Union, the state's largest federally insured credit union, lost $32 million for the year, including $2.4 million in losses in the fourth quarter. Its net worth stood at 8.9 percent and delinquent loans represented 6.5 percent of total loans.

Nevada Federal is encouraging some of its largest depositors to move their savings to other institutions, because it is getting no demand for loans that could be funded with the deposits. In February, Nevada Federal said it changed four of its branches to self-service in order to save money. The credit union said it was able to avoid layoffs as a result of attrition and job reassignments.

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