SAN DIEGO – Thanks in part to expenses saved on operations and significantly less money going into Allowance for Loan Losses, North Island Credit Union on Thursday said it posted earnings of $7.66 million for the first quarter of 2010.
The $1.4 billion credit union had a 2009 net loss of $52.3 million, including a $9.6 million NCUSIF stabilization expense. For Q1 2010, North Island said it originally had projected negative earnings of $3 million based on anticipated transfers to its Provision for Loan Loss (PLL). Positive earnings largely were attributed to two areas: the impact of reduced operating expenses gained from changes made in 2009 and a reversal of $7.5 million from the Allowance for Loan Losses based on “improving trends” in automobile and home equity loan delinquency.
North Island said ongoing additions are anticipated to its PLL through the remainder of 2010. The credit union is targeting “a possible breakeven operation this year, significantly better than 2008 and 2009, and $10 million ahead of an initial 2010 annual projection.”
John Tippets, North Island’s president and CEO, cautioned that these positive first quarter results, while demonstrating improvement, do not yet predict a long-term trend.
“Accounting adjustments are only one-time benefits. We must stay focused on continued progress in building profitable revenues, make additional reductions in operating expenses, and further reduce delinquencies and charge-offs,” Tippets said in a statement. “I will feel more confident about our overall progress when trends can be demonstrated over the rest of this year and into 2011.”
North Island cited several first quarter highlights, including:
• A 77% increase in the number of auto loans made over the fourth quarter of 2009, which was a 98% increase in loan dollars
• The successful launch of a Prime Plus Line of Credit product
• A 19% decrease in delinquent loans over 30 days past due
• A 23% increase in new members over the fourth quarter level
• Ongoing core operating expenses, net of one-time charges or recoveries, at $9,988,142, which were 17.1% less than first quarter 2009 and 29.7% less than first quarter 2008
