MANHATTAN BEACH, Calif. – Kinecta FCU, the one-time $4.5 billion credit union that has struggled through the state’s recession, reported a $10.1 million net this morning for the first quarter, after a $30.6 million loss for 2011—the latest California giant to return to profitability.
Much of the improvement in the financial for the former Hughes Aircraft Employees FCU was due to a 41% cut in cost of funds—the dividends paid to members on accounts—to just $5.8 million, a drop of $4 million from the first quarter last year.
Kinecta joins a handful of other California giants that have returned from the red last year and this year, including Wescom Central CU, Arrowhead Central CU, North Island Financial CU, Altura CU and Kern Schools FCU, presaging what many predict will be the best year ever for credit unions.
Kinecta lost $126 million in 2008-2009, before rebounding with a $14.6 million net for 2010, then falling back into the red for 2011. At March 31 it had total assets of $3.2 billion and net worth of 7.2%, qualifying for NCUA’s well-capitalized standard.
The credit union giant's financial woes were largely attributed to killing a merger between Kinecta and nearby NuVision FCU that had been two years in the making.
