18 Dec

Keys to success: A conservatorship success story

first_img 16SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Debbie Matz Debbie Matz was nominated by President Barack Obama to serve as the eighth board chair of the National Credit Union Administration (NCUA). After confirmation by the U.S. Senate on … Web: www.ncua.gov Details This is the success story of Keys Federal Credit Union in Key West, Fla., which recently, against all odds, was returned to its members after the longest conservatorship in NCUA history.When placed into conservatorship, Keys was all but dead in the water. The story of how this unstable credit union reversed course and is now thriving is one of collaboration and determination.Setting SailKeys Federal Credit Union is the oldest financial institution in the island chain known as the Florida Keys. It was chartered in 1940 to serve Key West Naval Air Station employees.The field of membership expanded in 1994 to a community charter serving all islands in the chain. It ultimately reached more than 10,000 members and $120 million in assets.The Perfect StormHowever, the credit union was knocked far off course by the financial crisis that began in 2008. The crisis depressed tourism throughout the Florida Keys, causing massive job losses and a 50 percent drop in real estate values.Complicating these unfortunate circumstances, Keys was weighed down by heavy concentration risk. Real estate loans accounted for more than 67 percent of the portfolio and almost 900 percent of net worth.By September 2009, the delinquency ratio loomed above 5 percent; the net charge-off ratio was closing in on 1 percent; and operating losses swelled to $5 million.Keys had already undergone a change in management, and the Chairman was attempting to merge with another Florida credit union. When that merger fell through, directors of Keys consented to a voluntary conservatorship.On Sept. 24, 2009—one month after I was sworn in as NCUA Board Chairman—the NCUA Board voted unanimously to conserve Keys in order to protect the National Credit Union Share Insurance Fund.Navigating Stormy SeasDuring the first year of conservatorship, loan losses continued to rise and the net worth ratio plunged to 2.4 percent by September 2010.Given its declining trajectory, Keys was on course to cost the Share Insurance Fund as much as $20 million. But NCUA’s Conservatorship Board had a different vision: to turn Keys around and prevent those losses.In early 2011, the Conservatorship Board made tough decisions to close two branches, reduce staff, renegotiate contracts, and temporarily suspend the real estate and member business lending programs that had caused deep losses. To boost consumer lending, the main office was relocated to a more visible retail location.In May 2011, the Conservatorship Board hired Scott Duszynski as President/CEO. Scott had worked at Keys for 15 years in operations, accounting, strategic planning, and information technology. In addition to his strong credentials, he maintained a strong presence in the local community and positive working relationships with staff and members.At the direction of the Conservatorship Board, Scott immediately implemented significant operational changes. He also began working to strengthen Keys’ relationship with the Navy community and reestablish the credit union’s presence in the field of membership. Righting the ShipImprovement was slow. It wasn’t until the end of 2012 that the local economy showed signs of recovery. Delinquency and loan losses were finally receding, and the credit union started to turn around.At the beginning of 2014, when Myra Toeppe became the new NCUA Region III Director and the Agent for the Conservator of Keys, the Conservatorship Board realized additional, fundamental changes were needed if the credit union was ever to be returned to the membership.This required a revised Net Worth Restoration Plan and development of a realistic, viable business model. Operations were further streamlined; fees were raised to reasonable levels, and loans were shifted from real estate to autos and credit cards.With these changes, earnings improved substantially. Incredibly, return on assets in 2014 topped 1 percent, and in the first half of 2015 approached 1.4 percent. Even more remarkably, Keys outperformed its Net Worth Restoration Plan for four consecutive quarters, and by September 2015 had a net worth ratio approaching 6 percent.Charting the Future CourseBefore returning the credit union to its members, the Conservatorship Board established an Advisory Board of seven qualified and motivated volunteers who would form the credit union’s board of directors and supervisory committee. The seven volunteers were long-time credit union members with varied backgrounds and strong ties to the community.These enthusiastic volunteers participated in numerous educational courses and attended monthly meetings with the Conservatorship Board and NCUA staff to gain an understanding of the duties and responsibilities required of credit union board members. After two years working with the Advisory Board, the Conservatorship Board determined that these seven dedicated individuals were ready and able to guide Keys into the future.Celebrating SuccessAlthough a long time in coming, Keys Federal Credit Union is a conservatorship success story. As counterintuitive as it may seem, this conservatorship ultimately saved the credit union from failure and saved the Share Insurance Fund from millions of dollars in losses. In doing so, it provided members with continued access to the affordable financial services they have come to expect for 75 years.This remarkable recovery was made possible through the collaborative efforts of Keys’ management and staff, the Advisory Board, NCUA staff, and the loyal members who stuck with their credit union through turbulent times.Through sheer determination and commitment by the management and Conservatorship Board, willingness to reshape the business model and make very tough decisions required to stabilize and revitalize the credit union, Keys will remain open to many generations of local residents—hopefully for at least another 75 years.last_img read more

23 Sep

Make some noise for Day of Prayer

first_imgBatesville, IN—The Batesville Kiwanis Club, Batesville Rotary Club, Southeastern Indiana YMCA along with the City of Batesville regret to announce the annual Community Prayer Breakfast, originally scheduled for May 7 has been canceled.To honor this annual tradition, the organizers are asking that all citizens and organizations of Batesville ring a bell or honk your car horn at noon on May 7.last_img

20 Sep

Gunners handed Sanchez boost

first_img Sanchez suffered a bang to his knee during the first half at the Emirates Stadium and Arsene Wenger was ready to substitute him at half-time but the Chilean insisted he could continue. The 26-year-old was returning from a two-week lay-off with a hamstring problem but his latest setback is more of an impact injury and considered to be only a minor knock. Sanchez could even play in this weekend’s FA Cup fixture, although Wenger may choose to rest his leading scorer with a busy schedule to come. Ramsey’s diagnosis is more severe. The midfielder is undergoing tests from Arsenal’s medical team but will not return before the Champions League last-16 first leg tie against Monaco on February 25. The club are reluctant to place a timescale on Ramsey’s recovery, particularly given the concerning regularity of the Welshman’s fitness problems this season. He missed three weeks after injuring his hamstring against Tottenham in September and was out for almost six weeks following a recurrence in December. “Yes, it is his third hamstring injury this season,” Wenger said after the game against Leicester. The news on Aaron Ramsey’s latest hamstring strain is, however, less positive with the Gunners midfielder certain to be out for a fortnight at the very least. Sanchez and Ramsey both had to be taken off in the second half of Arsenal’s 2-1 win against Leicester on Tuesday. “Last year it was a thigh injury but this year it’s a recurrence of hamstrings. “You cannot say it’s not a worry because after a while the player doesn’t play with the freedom in the mind. “He’s not overplayed. Before I just played him in every game but since he’s had these problems, I’m a bit more cautious with him.” Press Association Alexis Sanchez’s knee injury is not considered serious and the Arsenal striker is expected to be available for Sunday’s FA Cup tie against Middlesbrough.last_img read more