Problem loans wiped out the net worth of First Jersey Credit Union (Wayne, NJ).
The credit union had slightly less than $10.4 million in commercial loans not secured by real estate. presumably most or all were secured by taxi medallions.
The $85.8 million credit union reported a fourth quarter loss of $3.1 million and a 2017 loss of $8.9 million.
As a result of the loss, the credit union reported net worth of zero at the end of 2017, down from $8 million at the end of 2016.
The credit union reported a provision for loan and lease losses of almost $6.8 million for 2017, up from $4.6 million at the end of 2016.
First Jersey had $3.4 million in delinquent loans, down from $5.6 million from the third quarter of 2017 and $5.7 million from a year ago. The delinquent loan ratio was 5.83 percent, down from 8.88 percent as of September 2017 and 7.82 percent from the previous year.
A majority of the delinquent loans were member commercial loans not secured by real estate. As of December 2017, $2.1 million of these loans were 60 days or more past due. In other words, 20.7 percent of the commercial loans were delinquent.
Net charge-offs were $2.4 million at the end of 2017, of which $2 million was member commercial loans not secured by real estate.
Troubled debt restructured (TDR) commercial loans not secured by real estate were $3.9 million at the end of 2017. At the end of 2017, 12.33 percent of TDR commercial loans were delinquent.
The increase in provision for loan losses relative to net charge-offs caused allowance for loan and lease losses to post a year-over-year increase from $4.5 million to $5.8 million. As a result, the coverage ratio (allowance for loan and lease losses divided by delinquent loans) to increase from 79.97 percent at the end of 2016 to 170.12 percent at the end of 2017.
This increase in the coverage ratio suggests that the credit union expects further losses from its loan portfolio.
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The Duke Street Brain Trust is alive and well. 1st Jersey CU is the poster child of the NCUA gone mad. Gone mad because the NCUA has intentionally, and deliberately ignored the basic fundamentals of its regulatory job description in protecting the NCUSIF. If the NCUA does not protect and defend the NCUSIF then who will? Look at the NCUA data on 1st Jersey. Why has the NCUA failed to place 1st Jersey into conservatorship and liquidation? The greater the 1st Jersey losses the bigger the NCUA budget, the greater NCUA audit hours assigned to the troubled credit union. It serves the NCUA civil servants to permit 1st Jersey and other troubled credit unions to spin out of control. There is no financial incentive to shut it down too soon. There is a huge self-serving NCUA incentive to let the losses soar. And there you have it.
ReplyDelete12-2014 Net Income: (-$236,620)
12-2015 Net Income: (-$2.6M)
12-2016 Net Income: (-$4.2M)
12-2017 Net Income: (-8.9M)
Hello NCUA do you see a negative trend here? Did anyone at the NCUA notice the negative numbers are growing larger each year?
12-2014 Net Worth: $14.6M
12-2015 Net Worth: $11.9M
12-2016 Net Worth: $7.9M
12-2017 Net Worth: (-$945,815)
Did the NCUA EIC notice the Net Worth is decreasing each and every year? Did the NCUA Capital Market Specialist observe Net Worth has now gone into the Negative lane of traffic?
12-2014 Assets: $152M
12-2015 Assets: $143M
12-2016 Assets: $115M
12-2017 Assets: $85M
Anyone catch the credit union business plan approach: Shrinking Your Way to Success! Has the NCUA issued a cease and desist order on 1st Jersey directors and management? Has the NCUA issued a work prohibition order on these fine financial wizards? Has the NCUA fired the CEO, CFO, and directors?
Has the credit union notified its membership holding over $1.5M in uninsured shares they are at risk of financial loss? Has the NCUA notified the credit union community assessments are on the way to cover up the NCUA mismanagement and incompetence at 1st Jersey, Progressive, Melrose, etc.? Will the NCUA share with the credit union community the exposure going forward in order to budget for ongoing annual assessments until hell freezes over? No longer is it: "Who's in your wallet?" The question now is: "Is anything left in your wallet?" If yes, send it to the NCUA.
So now, Christopher Davis is the CEO at Louviers FCU in Newark, DE...He was with First Jersey prior to 2017 and per online records, looks like he had at least been with them since 2014...My thoughts are "Why isn't NCUA looking at whose running the credit union's into the ground, prior to allowing the CEO to leave right before the crap hits the fan at one credit union,and gets hired into a nice cushy CEO position at another credit union, while everyone at the prior credit union is left to take the fall...Doesn't make sense...No different than how the NCAA handles their coaches I guess, but before a business hires...Do your research...look at at least 5 yrs worth of call reports.
ReplyDeleteWere the Directors held accountable ???
ReplyDeleteI don't believe so.
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