The News-Gazette.com: Most area credit unions report profits in second quarter of 2008

Most area credit unions report profits in second quarter of 2008

By Don Dodson

Sunday, October 19, 2008 8:00 AM CDT

CHAMPAIGN – There was a slight increase in the number of area credit unions reporting losses during the second quarter of 2008, according to statistics filed with federal regulators.

Of 34 credit unions in East Central Illinois, seven reported losses during the second quarter, compared with five during the first quarter.

Most of the losses tended to be on the small side. The largest was a $45,000 net loss at Community Plus Federal Credit Union in Rantoul, resulting in a year-to-date net loss of $35,000.

Community Plus, with $11.6 million in assets, was the only area credit union whose rating was downgraded by BauerFinancial for the quarter that ended June 30. The rating fell from 5-star ("superior") to 4-star ("excellent").

Most credit unions in East Central Illinois received superior, excellent or good ratings from BauerFinancial. The rating service gave 5-star ratings to 11 credit unions, 4-star ratings to four credit unions and 3-star ratings to eight credit unions.

One credit union, the Electrical Workers Local 601 Credit Union, received a "zero" rating after reporting a $22,000 loss for the quarter, for a year-to-date loss of $224,000.

But that credit union merged into the University of Illinois Employees Credit Union, which has a 5-star rating, on July 1.

The other 10 credit unions were not rated by BauerFinancial. Rantoul-based Credit Union 1, the largest credit union in East Central Illinois, was not rated because it is insured by a private company, American Share Insurance, rather than by the National Credit Union Administration.

The remaining nine weren't rated because they're too small. BauerFinancial doesn't rate credit unions with less than $1.5 million in assets.

Other credit unions reporting losses

Besides Community Plus and Electrical Workers 601, the other five credit unions reporting losses in the second quarter were:

– First Illinois Credit Union, Danville, $16,000 loss, for a year-to-date loss of $15,000.

– Paris Hi-Way Credit Union, Paris, $14,000 loss, for a year-to-date loss of $8,000.

– Route 1 Credit Union, Paris, $11,000 loss, for a year-to-date loss of $6,000.

– ICG Community Credit Union, Champaign, $9,000 loss, for a year-to-date loss of $9,000.

– Clifford-Jacobs Employees Credit Union, Champaign, $5,000 loss, for a year-to-date gain of $10,000.

Four credit unions that reported losses in the first quarter – Canaan Credit Union, Carle Employees Credit Union, Champaign Postal Credit Union and MEA Credit Union – either broke even or showed a profit in the second quarter.

Nonperforming assets

Seven credit unions had relatively high levels of nonperforming assets – namely loans where principal and interest payments weren't being met.

As was the case in the first quarter, the ICG Community Credit Union had the highest level, with nonperforming assets accounting for 10.3 percent of all assets. That was slightly lower than the 12 percent recorded in the first quarter.

Others with high percentages of nonperforming assets included:

– Douglas Credit Union, Tuscola, 5.68 percent. That credit union has agreed to merge into Credit Union 1, effective Dec. 1.

– Canaan Credit Union, Urbana, 5.48 percent.

– Route 1 Credit Union, Paris, 3.75 percent.

– Danville Holy Family Credit Union, Danville, 3.59 percent.

– IBEW 601 Credit Union, Champaign, 3.31 percent.

– Blaw-Knox Credit Union, Mattoon, 3.02 percent.