RIVERSIDE, Calif. — Altura Credit Union reported $3.82 million in net income during the second quarter of 2014, marking 13 consecutive quarters of positive earnings.
Q2 2014 net income was up $350,000 from $3.47 million in Q2 2013.
The CU's assets were $730 million, roughly the same as at the end of the first quarter. Its first half earnings were $6.87 million, compared to $8.45 million reported for the first half of 2013.
Altura's net worth ratio at the end of Q2 2014 was 11.76% ("well capitalized"), up from the same period last year when it reported 10.82% ("well capitalized").
In January Altura CU said it had net income of $11.18 million in 2013 — making 2011-2013 the best three-year period in the credit union's history.
Digging Out
Altura, along with every other financial institution in the "Inland Empire" region of Southern California, suffered terrible losses during the recession due to widespread unemployment and plummeting home values. At the end of 2007 it had more than $1 billion in assets, but then lost $13.7 million in 2008, $20.1 million in 2009 and $5.8 million in 2010.
The turnaround began in 2011, when it reported net income of $8.4 million after $1.5 million in assessments. In 2012 Altura had net income of $17.4 million after paying $589,000 in assessments.
Altura's net worth ratio was 8.13% at the end of 2007, but dipped to as low as 5.61% ("undercapitalized") in December 2009 before rebounding.
"We are clearly seeing slow and steady economic recovery in the Inland Empire, which is reflected in Altura's solid second quarter performance," Mark Hawkins, Altura's president and CEO, said in a press release. "People have gotten their financial houses in order, paid down their debt and now are feeling better about their jobs and household income. This is translating into a boost in loan applications for us, which is a key source of our income."
Loan Growth, Falling Delinquencies
According to Hawkins, member credit quality is "excellent," and the CU is funding a higher percentage of loans than it has in years.
In 2014, Altura can report the longest period of month-to-month loan growth since the start of the economic downturn in late 2007, Hawkins said, adding "We anticipate that July will mark our fifth consecutive month of growth."
For the quarter ended June 30, Altura reported $374.2 million in outstanding loan balances, up from $364.3 million for the same period last year.
"Typically, we experienced a surge in lending during the summer months, a trend we have not seen since the summer of 2007, until now," Hawkins said. "This as a very positive indicator that member behavior is returning to what used to be normal.'"
Also reflecting the local improvement, delinquent loans declined to 0.75% for the period ended June 30, compared to 1.39% for the same period in 2013. At the same time, loan losses declined to just 0.55% versus a rate of 1.14% last year.
"This market continues to heal. The signs are positive and the improvement we are seeing is sustainable," Hawkins assessed.
New Technology
During the second quarter, Altura rolled out its new mobile app. The CU said the app has added mobile check deposit and new loan functionality to submit applications, receive loan approvals and confirm funding, all from a mobile device.
Altura also introduced a new product, Nexus Checking.
"Nexus Checking is based upon the idea that a checking account should be an ally," explained Jennifer Binkley, Altura's chief operating officer. "A key feature of the new account is no monthly fee if the member has any type of loan with Altura, or just makes five debit transactions monthly."
Nexus is a customizable account that also includes free online banking and mobile banking, Altura said.
