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Milwaukee CUs face merger pressures
MILWAUKEE (6/22/09)--Two suburban Milwaukee credit unions are dealing with regulatory requirements to address undercapitalization. One option is for the two credit unions to merge into healthier credit unions. The National Credit Union Administration (NCUA) and the Wisconsin Office of Credit Unions are working with Allco CU, West Allis, Wis., and First Security CU, Elm Grove, Wis., to fix their capital issues, said NCUA (The Business Journal of Milwaukee June 18). “Both institutions are undercapitalized per their 5300 call reports and are thus subject to net worth restoration plan requirements,” John McKechnie, NCUA director of public and congressional affairs, told News Now. “NCUA is not going to comment on the merger process regarding the names or the number of bidders. “We are saying that a merger is one of the possibilities being considered,” he added. “That’s per our regulations.” The $49.4 million asset Allco’s net worth ratio was 2.7% at the end of the first quarter, and the $35.4 million asset Security’s net worth was 0.29%. NCUA says 6% is an adequate capitalization level, the Journal said. Allco posted a first-quarter net loss of $146,915, and listed loan delinquencies of $5.4 million for the first quarter--a 16.4% increase from the previous quarter. First Security said it had a net loss of roughly $2.3 million for the quarter---mostly for loan loss provision, the Journal said. In a separate matter, Lifetime CU, a $32.4 million asset, West Allis-based credit union-- which posted a first-quarter net loss of about $2.2 million--is slated to merge into $1.282 billion asset, New Berlin, Wis.-based Landmark CU by June 30, the Journal reported.


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