NCUA Financial Reports Shed Light on Gabriels Community Merger

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Last month, Gabriels Community Credit Union merged with Michigan State University Federal Credit Union after a year of financial losses. The merger, which took place without a membership vote, was due to “extenuating circumstances of Gabriels,” said MSUFCU President/CEO April Clobes, though both the NCUA and the merging credit unions refused to expand on what those reasons were. (For more details, check out our article on the merger.)

Despite the silence, reports filed by the credit union showed that Gabriels Community had taken a sharp financial downturn in the last year, though more specifics were unclear. Now, recent Financial Performance Reports from the NCUA are shedding more light on the situation. Namely, that within the last year, Gabriels Community had lost $6.1 million, with a substantial loss of $5.8 million in the last quarter of 2023.

From that $6.1 million loss, $3.4 million was listed as “Miscellaneous Non-Interest Expense” in the fourth quarter, while the first three quarters of 2023 totaled just $2,465. There’s no more information given on the sudden and large expense in the report, but Clobes noted that the spending “reflects some of the operational concerns that Gabriels was experiencing.”

Additionally, the credit union reported a total of $2.8 million in provisions for loan losses for 2023, whereas in the previous year, that number was less than half. Again, the majority of these provisions were in the last quarter of 2023—specifically $2.2 out of $2.8 million.

The NCUA reports also confirm that Gabriels Community’s net worth had drastically declined, going from 10.72% at the end of 2022, to -8.52% at the end of 2023. Gabriels Community’s ROA took a similar loss, dropping from 2.66% at the end of 2022 to -19.64% at the end of last year.

While these reports don’t explain how these situations came about or what specific steps Gabriels took to try to remedy their financial issues, they do offer a bit more of an answer for the credit union’s members who may have been surprised by the merger, which Clobes called a friendly but necessary move.

The merger was finalized last month, and all members will be transitioned into MSUFCU by March 1, 2024.

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  • Chip Filson#1

    February 9, 2024

    Find out what the $3.4 million misc expense in the 4th quarter were for. Who got the money? Who approved the expense?
    April must have some clue even though the press indicates the regulators were in charge.

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