North Island CU Raises Net Worth With Positive Q1
SAN DIEGO – North Island Credit Union said it made “significant financial progress” in the first quarter of 2011, posting year-to-date income of $10.7 million and raising its net worth to a regulatory “adequately capitalized” level of 6.11% or $70.5 million.
The CU said it improved its efficiency, cutting its net expense ratio to 1.59%; outperforming by 100 basis points the comparable peer average in San Diego of 2.59%. Overall expenses for North Island are approximately 47% lower than 2007 levels.
“As in 2010, the significant portion of net income is attributed to an accounting adjustment for an excess accrual in the allowance for loan loss reserves,” CEO John Tippets said in a release. “Because of a more stable economic environment and North Island’s continuing positive trends in delinquency and charge-offs, we were able to reduce the allowance and still retain a healthy reserve cushion.”
While delinquency percentages remain “higher than desired,” North Island said a majority of that is a result of troubled debt restructured loans, which must remain in the delinquency category for six months.
North Island said progress has been accomplished in many performance categories. Had the credit union posted a normal (budgeted) provision for loan losses, it still would have produced core earnings of $1.35 million for the first quarter. These earning were attributed to rental income derived from leasing 50% of the credit union’s headquarters space, improving net interest income, increasing fee income and the benefits of lower operating expenses.