PEORIA, Ill. – Credit unions all over the country are braving the economic downturn and coping handily with the growing costs of the corporate credit union meltdown to post strong financials for 2009.
"Our members deserve a lot of credit for that," said Mark Spenny, president of CEFCU, which reported a 1.05 return-on-assets for last year, after paying its members a $7 million extraordinary dividend.
Even with unemployment rising in the state, the core central Illinois market for the $4 billion credit union did not see the big run-up in real estate values and consequently did not see the rapid declines and resulting delinquencies, charge-offs and foreclosures. Last year’s success, $52.5 million in net income, before a $5.2 million charge for corporate credit unions, was enabled by strong mortgage refis and a solid growth in membership of 9,300 members and almost $400 million in new deposits, partly the result of the acquisition of the failed Valley CU. The deal, which put CEFCU into the lucrative Silicon Valley market, came at a discount, Spenny pointed out.
"Last year was one of the best years we’ve seen for membership growth," Spenny told The Credit Union Journal yesterday. "Some of it is a reflection of a flight to safety, some of it a reflection of a flight to trust."
Fairwinds CU, in Orlando, Fla., said it was able to rebound strongly from 2008 – when it reported a $28 million loss – to report a $13.1 million operating net because it was able to put enough away for allowance for loan losses in ‘08. "We focused a lot on reducing costs," said Kathy Chonody, chief financial officer for the $1.6 billion credit union. She said initiatives such as asking employees for cost-saving ideas, cutting out paper throughout the process helped cut costs by $1 million in 2009.
The lower loan losses and cost cutting will prepare Fairwinds for 2010, even with continuing troubles in the Florida market, where unemployment is headed toward 11% and an additional assessment that NCUA has warned credit unions to expect, according to Chonody, who projected a positive net of as much as $5 million for the year. "We’re very happy with that," she stated.
Other credit unions are reporting strong financials for 2009, as well:
• ESL FCU, in Rochester, N.Y., reported a $56 million net for 2009 and an ROA of 1.4%, even after paying members a $7 million ownership dividend and taking a $16 million charge for corporate expenses.
• Visions FCU, in New York, had a $37 million net and a 1.5% ROA for last year, even after a $3 million charge for the corporates.
• Wings Financial CU, in Minnesota, reported a $28 million net and a 1.1% ROA, despite a $2.6 million charge for the corporates.
• First Tech CU, in Oregon, reported a $23 million net and an ROA of almost 1.1%.
• Navy FCU reported a $259 net for the year, even after a whopping $207 million charge for the corporates. Without the charge, the $40 billion credit union would have had a 1.2% ROA.
