BRONX, N.Y.—Just what happened at Bethex CU that led to its conservatorship by NCUA Friday isn’t completely clear—but the $13-million credit union’s financials tell a story of a once successful CDCU with a well-respected CEO, that struggled with net income for much of the last 15 years.
Those financials also show a significant spike in income that began more than five years ago—as much as $2 million in “other income”—but then a big decline, suggesting Bethex Credit Union may have sought new revenue sources that dried up.
The CU’s 2015 summer newsletter reflected almost a sense of desperation from Bethex about its future.
“It’s been a rough 5 years for Bethex. Our assets have dropped, our income has fallen and our expenses have risen, so we’re turning to you, our members, to take advantage of our staff’s fund raising efforts this summer,” the newsletter stated. “We will have raffles, new and used jewelry for sale, a bake sale, items for sale at the teller windows and lots more. If you want to contribute items we can sell, we appreciate it. We look forward to you buying what we will be offering. It’s your credit union, let’s have fun fundraising!”
Respected CEO
Bethex was founded in 1970 by Joy Cousminer, well-known within the credit union community and who was the CU’s CEO up until the conservatorship. She is a member of the Cooperative Hall of Fame and was honored with credit unions’ highest honor, the Herb Wegner Award.
The CU’s troubles started in 2002 when it lost $101,156. The next year it lost $175,045, made $14,219 in 2004, $24,495 the next year, $22,174 in 2006 and $48,683 in 2007. The
credit union lost money again ($16,690) in 2008, then its fortunes significantly changed.
Bethex reported $147,424 in income in 2009, $154,398 in 2010, $925,256 in 2011 and $429,949 in 2012. But losses began again in 2013—this time in much larger amounts.
Bethex lost $481,950 in 2013, $867,108 in 2014, and $787,603 through the first half of this year. Capital fell sharply in 2015, dropping from 11.37% at the close of 2014 to 5.75% through June.
Other Income Rises, Falls
Bethex’s large jump in income in 2011 and 2012 corresponds to a sharp rise in “other income,” Call Report data shows. As other income markedly fell, almost by 50% annually starting in 2013, losses climbed.
On the deposit side, Bethex CU’s fortunes also show a slide. Share drafts declined rapidly, to $2.4 million in 2013 ($1.8 million through June 2015) from $14.5 million in 2012. Membership growth at Bethex has remained about flat.
Lending suffered as well in recent years, with delinquencies skyrocketing to 17.44% in 2014 an 15.35% through June.