Arizona's credit unions have been hit hard by the real-estate downturn, a weak job market and mounting bankruptcies.
Ninety-five percent of Arizona-based credit unions lost money in this year's first quarter, compared with 75 percent of Arizona-based banks.
"They're feeling the pain their members are feeling," said Scott Earl, president and chief executive of the Arizona Credit Union League.
Arizona's credit unions count nearly 1.6 million customers, with membership rising of late as people seek low-risk places to put their money, Earl said.
The government recently enhanced its credit-union deposit protection, and some causes behind the big first-quarter losses may be temporary.
Still, more than one-third of Arizona's credit unions lost at least $1 million during the quarter, a sizable setback for institutions that tend to be smaller than banks.
The typical Arizona credit union serves about 6,800 people.
The state's second-largest credit union, Arizona Federal, reported a $48 million loss in the quarter after a $116 million loss in 2008. That annual loss is one of the biggest ever for any credit union.
"It comes back to whom we serve," said Ron Westad, president and chief executive of the 220,000-member credit union. "Our members are middle America, and they have been drastically impacted by the local economy."
Arizona Federal has responded by cutting staff, tightening its lending standards, closing some branches and reducing advertising.
Westad said Arizona Federal also has improved the quality of its loans and expects to post a profit in the second quarter yet it's still undercapitalized and likely will remain so through next year.
Desert Schools Federal Credit Union lost $12.8 million in the first quarter, reflecting stabilization costs, increased provisions for loan losses and more.
Still, the state's largest credit union, with 360,000 members, has kept growing through the recession, boosting membership by 4 percent, deposits by 8 percent and loans by 10 percent last year, spokesman Jason Meyers said.