Credit Union Assets Flat in 2005; Three Mergers Shorten Roster

by Gwen Moritz  on Monday, Oct. 16, 2006 12:00 am  

(Click here for page 1 of the list of largest credit unions. Click here for page 2. Click here to get the list in spreadsheet format. And click here for a chart of the state's fastest growing credit unions.)

Credit union assets in Arkansas remained flat in 2005 — up less than 1 percent from 2004 — while the number of individual credit unions declined from 73 to 70.
Still, credit unions remain a tiny piece of the banking market in Arkansas. All 70 combined had assets of just $1.56 billion at the end of 2005, barely more than Metropolitan National Bank of Little Rock all by itself.
The largest of the lot, Arkansas Federal Credit Union of Jacksonville, grew its assets by 3 percent last year — and had grown another 6.5 percent during the first six months of 2006, according to call reports filed with regulators at the National Credit Union Administration. Larry Biernacki replaced AFCU's retiring CEO Hank Klein in June 2005 and announced a goal of tripling the credit union's assets within 10 years. AFCU ended last year with $410 million in assets, a number that had climbed to almost $437 million by June 30.
The three credit unions that have disappeared since the end of 2004 are:
• Arkansas Power & Light El Dorado FCU, which merged its less than $400,000 in assets into the Lion Federal Credit Union in August 2005.
• Little Rock Teachers FCU, which merged its $2 million in assets into Arkansas Federal on April 30.
• ASHE Federal Credit Union, which served employees of the Arkansas State Hospital at Little Rock and which was merged into the VA Hospital Federal Credit Union.
ASHE's former manager, Joyce Miles, agreed in December to an NCUA disciplinary action that prohibits her from being employed by any federally insured institution.
The fastest-growing credit union in 2005 was the smallest in the state in 2004: Phillips County Self-Help Federal Credit Union at Helena. By increasing its assets by 24.2 percent — to a whopping $389,394 — it is now larger than the credit union at the Arlington Hotel in Hot Springs.
Diamond Lakes Federal Credit Union of Malvern reported growth of just under 10 percent in 2005. Diamond Lakes will open its second branch, in Hot Springs, in mid-November, according to CEO Dee Edie.
The vast majority of credit unions were profitable in 2004; only seven reported net losses. But one of those, Crossett Paper Mills Employee Federal Credit Union, was deeply into red ink with a loss of $1.67 million.
Dennis E. Gibson, who became CPME's CEO at the end of May, said the credit union had spent two years working through problems caused by the "generous" lending philosophy of former CEO Gerry Rodgers.
The turnaround began under interim CEO Don Woods, who hired a senior lender experienced in risk-based lending.
"We will come close to breaking even on the bottom line this year," Gibson said. "We have dropped a little in assets as we have priced our products accordingly."
Also affecting loan demand has been uncertainty over jobs at the largest employee group in CPME's membership, Georgia-Pacific, which was purchased by Koch Industries Inc. of Wichita, Kan., in November.
"As we are recovering from those old loans, we really don't have the freedom to cut our margins," Gibson said.
CPME is close to opening a second branch in Fordyce, and a third should be opened in 180 days, Gibson said. "We're not ready to announce [where], but I believe you can assume it's where there is another Georgia-Pacific mill," he said. That would be Rogers.



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