RIVERSIDE, Calif. — The $678 million Altura Credit Union 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.
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, set aside just $3.5 million in its Provision for Loan and Lease Losses, and had a net worth ratio of 8.13% ("well capitalized"). Then came the financial crisis and a dizzying roller coaster ride that featured a sharp dip and a long climb up.
In 2008, total assets dipped to $883 million, PLLL went up to $14.9 million, it posted a net loss of $13.7 million, and its net worth ratio was 7.67% ("well capitalized").
The bottom really fell out in 2009, when Altura was forced to close branches and lay off staff. Total assets were $850 million, PLLL more than doubled from the previous year to $34.6 million, the CU posted a loss of $20.1 million and net worth ratio hit a recession low point at 5.61% ("undercapitalized").
The CU remained in the red in 2010, as total assets fell to $721 million and PLLL remained high at $35.6 million. The CU managed to cut its net loss to $5.8 million, including assessments, and its net worth ratio ticked up slightly to 5.81% (still "undercapitalized").
The turnaround began in 2011. Total assets fell again to $642 million and PLLL remained elevated at $30.7 million, but net income was $8.4 million even after Altura paid $1.5 million in assessments. Its net worth ratio rebounded to "well capitalized" range at 7.83%.
In 2012 total assets finally showed a gain from the previous year, up to $655 million. Thanks in part to cutting its PLLL to $19.1 million, net income was $17.4 million even after paying $589,000 in assessments. Net worth ratio was well over the "well capitalized" standard at 10.34%.
Last year total assets rose again to the current $678 million, PLLL was reduced to $10.1 million and the $11.1 million in net income was after paying $485,000 in assessments. Net worth ratio climbed again to 11.63% ("well capitalized"). The latter figure is Altura's highest NWR in its 56 years of operations.
According to Mark Hawkins, Altura's president and CEO, the credit union made key investments in technology, facilities, employee compensation and benefits, as well as in products and advertising in 2013.
"With the improving economy, it was time to address these issues, to ensure we could best meet the needs of our members going forward," he said in a prepared statement. "This region, our members and the credit union were really challenged over the past six years. It has taken a lot of planning and, in some cases, sacrifice to maintain our staffing and our systems, while continuing to serve our members' needs. Now that we have done the heavy lifting and the recovery is taking hold, we are ready to tighten our focus even more on supporting our members and helping them achieve their financial goals."
Hawkins credited Altura's management and leadership for making "tough strategic decisions" during the financial crisis and said those have "paid off" with Altura's "strong position."
"It wasn't always easy and the pain was very real, but today Altura is in great shape," he declared. "Our systems have been tested, tightened and, in some cases, redeployed. With the improvement in the local economy, and after all of the hard work, we are beginning to see our strategic efforts to boost consumer lending activities paying off."
Altura also reported improving trends in revenue growth in 2013, largely the result of continued strength in its overall asset quality and increasing volumes.
"As these trends continue, and we believe they will, everyone should be very pleased with the new year," Hawkins said.
