(Alexandria, VA) - The National Credit Union Administration (NCUA) liquidated Southwest Community Federal Credit Union of St. George, Utah Wednesday, June 30, 2010. The credit union has five branch offices in southern Utah, according to their website; three in St. George, one in Hurricane and one in Cedar City. The credit union employs 58 full-time and 20 part-time personnel.

The announcement by David M. Marquis, Executive Director, of the NCUA said, immediately following the liquidation of Southwest Community Federal Credit Union, NCUA entered into an agreement with Chartway Federal Credit Union of Virginia Beach, Virginia, to purchase and assume certain assets and liabilities of Southwest Community Federal Credit Union. At the time of liquidation, Southwest Community Federal Credit Union had approximately $139,094,182 in assets and served 19,041 members. Southwest Community Federal Credit Union was established in 1937 to serve the Dixie Consumer’s Cooperative Association in Washington County, Utah. This is the 10th federally insured credit union liquidation in 2010.

Members of Southwest Community Federal Credit Union will experience no interruption of credit union service during this process. Member accounts remain federally insured by the National Credit Union Share Insurance Fund (NCUSIF) up to at least $250,000.

Chartway Federal Credit Union is a full service credit union and its new members will have access to a broad array of financial services offered throughout the United States. With assets of $1.6 billion, Chartway FCU serves approximately 191,000 members located throughout the country. Chartway has 55 branch locations in Arkansas, Florida, Georgia, New Jersey, North Carolina, Ohio, Rhode Island, Texas, Utah, and Virginia and also serves its members through nearly 4,000 shared service locations nationwide. It is located at 160 Newtown Road, Virginia Beach, Virginia.

Southwest Community FCU was significantly undercapitalized with a net worth ratio of 3.18 percent, according to its March 2010 financials. The credit union reported a loss of almost $700,000 during the first quarter after posting a loss of $6.6 million for 2009.

Southwest Community had a net charge-off rate of almost 4 percent for the first quarter and reported that 6.33 percent of its loans were 60 days or more delinquent. Roughly 90 percent of the credit union's delinquent loans were associated with first mortgages. The delinquency rate on the credit union's member business loan portfolio was 9.06 percent.

Southwest Community at the end of the first quarter reported holding slightly more than $6 million in foreclosed and repossessed assets.

NCUA did not disclose the cost of this failure to the National Credit Union Share Insurance Fund (NCUSIF) which is a government backed insurance fund for credit union deposits similar to FDIC insurance for banks.