Committed to Educating the Public About Today’s Credit Unions
Committed to Educating the Public About Today's Credit Unions
Lalita Clozel of the Wall Street Journal reports:
WASHINGTON—Credit unions are buying small banks in record numbers, a trend that is prompting pushback from the banking industry.
Credit unions have acquired 21 U.S. banks since 2018, according to S&P Global Market Intelligence, compared with 12 purchases in the prior five years.
One credit union here has an unusual item for sale: a $2-million condominium.
cPort Credit Union has listed a luxury condo on the top two floors of its newest branch in Portland’s East End. The 2,570-square-foot residence, listed this week by Legacy Properties Sotheby’s International Realty, is in one of the city’s hottest development areas, with a view of the waterfront, according to Mainebiz. The credit union told the publication the residential property is a first-time event, and that it did so to make the most of the two floors it couldn’t use for office space without a required second stairwell.
“We’re maximizing the value of this property,” Gene Ardito, cPort’s president and CEO, told Mainebiz, adding the credit union could have listed the condo even before construction, but held off until completion because “we felt this was the kind of space you had to see.”
cPort bought the land in 2015 prior to a building boom that has attracted newcomers, Mainebiz reported.
Quartz Countertops, Private Elevator
The property includes quartz kitchen countertops, an interior bar area that leads to the outdoor rooftop terrace and Sonos smart-home technology to control everything from lighting to music. The condo has its own entrance and elevator, and offers a walkable neighborhood and waterfront access, the publication stated.
From Jim DuPlessis at Credit Union Times:
PenFed announced Wednesday that it has acquired Progressive Credit Union, a New York City-based credit union that has suffered heavy losses because of its taxi medallion loans.
The NCUA approved the emergency merger, which became effective Jan. 1. Progressive ($382.8 million in assets, 2,897 members as of Sept. 30, 2018) lost $69.5 million in the 12 months ending Sept. 30, up from a $65.5 million loss for the preceding 12 months.
PenFed ($24.1 billion in assets, 1.7 million members as of Sept. 30) chose to keep all of Progressive’s loans including its taxi medallion loans. James Schenck, president/CEO of PenFed, valued the taxi medallion loans at about $290 million, saying they accounted for essentially all of Progressive’s commercial loans not backed by real estate, a portfolio that stood at $285.8 million at the end of the third quarter.
The taxi medallion-backed loans were also the main force behind Progressive’s overall poor loan performance. As of Sept. 30, 24.8% of its total loans were at least 60 days delinquent, compared with delinquency rates of 0.67% for all federally-insured credit unions. Progressive’s net charge-off rate was 10.1%, compared with 0.57% nationally.
PenFed’s delinquency rate was 0.65% at Sept. 30, and its net charge-off rate was 0.65%.
In June 2018, Municipal Credit Union CEO Kam Wong was charged with embezzlement and accused of using members’ money to maintain a lavish lifestyle, despite already earning a $2 million salary. From the Credit Union Times:
Kam Wong pleaded guilty in U.S. District Court in Manhattan Monday to embezzling nearly $10 million from the $2.8 billion Municipal Credit Union where he was president/CEO.
From 2013 through January 2018, the 62-year-old Wong ran a multi-faceted embezzlement scheme and took steps to conceal that he stole $9,890,375, U.S. Attorney Geoffrey S. Berman in New York said. However, what Berman revealed publicly for the first time is that Wong obtained drugs from a former credit union supervisory committee member.
Berman did not reveal the supervisory committee member’s identity. In June, about a month after Wong had been arrested on a criminal complaint, a U.S. District Court judge ordered Wong to undergo drug testing and treatment as part of his $1 million bail secured by his home at Long Island’s Valley Stream.
Did A Massive Multistate Credit Union Just Close Another Small Community Bank? From CUtoday.info:
$1.7-billion Advia CU here announced it intends to buy $155-million Golden Eagle Community Bank in Woodstock, Ill.
The deal, which still awaits bank shareholder and state and federal regulatory approval, when finalized would make Advia the first credit union to close three whole-bank buys. The transaction is expected to be completed in the first quarter of 2019, Advia stated.
Advia purchased Peoples Bank of Elkhorn, Wis., in 2017, and Mid America Bank in Janesville, Wis. in 2016.
Dunedin, Fla.-based Achieva CU, Five Star CU in Dothan, Ala., and IBM Southeast Employees CU, Delray Beach, Fla., are the only other credit unions to buy more than one bank.
Last year Eagle Community Bank earned $686,000, and has shown net income of $448,000 this year through Sept. 30, according to FDIC data.
“We are thrilled to have the opportunity to welcome the customers of Golden Eagle Community Bank as members of Advia Credit Union,” said Cheryl DeBoer, Advia president and CEO. “At Advia, our mission is to provide financial advantages to those we serve. We are growing our commercial-focused financial solutions, strengthening our local position in Northern Illinois, and have a well-rooted commitment to community involvement and volunteerism, similar to that of GECB.”
Melrose CU finally closes After taxi medallion losses, but another large credit union picks up the pieces. From the National Credit Union Administration:
ALEXANDRIA, Va. (Aug. 31, 2018) – The National Credit Union Administration today liquidated Melrose Credit Union of Briarwood, New York.
Teachers Federal Credit Union, of Hauppauge, New York, immediately assumed all of Melrose’s members and shares as well as some loans and other assets. Teachers Federal Credit Union is a federal credit union that serves 300,541 members and has assets of nearly $6.1 billion, according to the credit union’s most recent Call Report.
New Teachers Federal Credit Union members should experience no interruption in services, and their accounts remain federally insured by the National Credit Union Share Insurance Fund. Administered by the NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.
