Chetco FCU (Harbor, OR) released its first quarter financial data and reported a massive loss and was insolvent.
Chetco, which is currently under NCUA conservatorship, reported a loss of $19.4 million for the first quarter, as the credit union added almost $18.4 million in provisions for loan losses.
The credit union is insolvent with a negative net worth of $18.4 million. Its net worth ratio was minus 6.94 percent.
Chetco reported $66.7 million in loans that were 60 days or more past due with over $33 million in loans 12 months or more past due. As of March 31, over 24 percent of its loans were delinquent.
Additionally, Chetco reported $11.5 million in other real estate owned.
Credit Union Journal is reporting that NCUA has provided Chetco with $10 million in capital assistance.
This weeks news about Chetco cannot compare or distract from last week's "Bank Failure Friday" -- with the takedown of Palm Desert National Bank, Plantation Federal Bank, InterBank, HarVest Bank and Bank of the Eastern Shore. FDIC estimates the newest losses to it's recently upside-down fund at $272.6 million. Together, the five banks closed had combined assets of $1.423 billion. Through the first 17 weeks of 2012, 22 banks with a combined $6.5 billion in assets failed. That compares with 39 banks with a combined $16.96 billion in assets that failed in the first 17 weeks of 2011.
ReplyDeleteCongress created the FDIC to "Restore confidence in the nation's banking system." Following the United States Banking Crisis of 2008 stemming from un-managed risks, it appears FDIC is failing in its statutory mission -- as evidenced by the cumulative and ongoing banking failures. Confidence in today's banking system is un-restored and tenuous, at best.
Persistent, unregulated systemic risks taken by America's banks were considered a national security issue and a threat to our way of life. Despite a taxpayer bailout of historic proportions, trillions of dollars of net US economic value were lost in home values, individuals' retirement funds, a "Great Recession" and runaway unemployment; all the secondary and downstream fallout of banking's crisis. There is no line that can connect this to Chetco.
Banks are foolishly hoping that by paying their trade group ABA to blog highlighting occasional missteps in the credit union sector, banks and bankers will somehow be granted absolution form a history that includes recurring recklessness. Not so. Banking's past and present has been darkened; the regulatory future that awaits American banking is even darker.