Altura Credit Union ($679.5M, Riverside, CA) is posting improvements all across its income statement with advances in income, net worth, and asset quality.
“This was our best quarter of the year,” says CEO Mark Hawkins in a release. “We foresee that continuing through December.”
The credit union, which is among California’s 50 largest credit unions by asset size, posted a net income of $3.37 million for 3Q 2011. This is a slight increase from the $3.1 million in net income it reported at the end of the second quarter and a significant improvement over the $1.5 million loss it reported in 3Q 2010.
In addition to steadily increasing its net income, Altura is also steadily increasing its net worth. The “adequately capitalized” credit union, which holds 0.54% of the total asset base of California credit unions, posted a net worth ratio of 6.89% in 3Q 2011, compared to 6.26% in 2Q 2011 and 5.38% in 3Q 2010. In fact, had Altura not had to contribute roughly $1.6 million to the NCUA stabilization fund, the community-chartered credit union would have posted a net worth ratio of 7.13%. And while serving its more than 96,500 members, the credit union has managed to cut its operating expense ratio from 63.9% in 3Q 2010 to 55.36% in 3Q 2011.
“We continue to watch our cost of operations very closely to maintain improvement in our net worth ratio,” Hawkins says.
Such results are not only a demonstration of Altura’s continued financial upturn but also a sign of the improving financial condition taking hold in California’s hard-hit Inland Empire.
“We also are seeing incremental improvement in the area’s economic conditions,” Hawkins says. “The local unemployment rate has begun to drop. Home foreclosures are down, although we are seeing more short sales.”
Despite increased activity in short sales, the credit union is posting a higher ROA than it has seen in four years.
Click on graph to view larger size. | Source: Callahan & Associates' Peer-to-Peer
Altura has reduced its delinquency and charge-offs to 2.85% and 4.0%, respectively. This compared to a delinquency ratio of 4.6% and a charge-off ratio of 4.66% during 3Q 2010. Such improving financial conditions have enabled Altura to reduce its provisions for loan losses, which are below projections for 2011 and far lower than 2010 levels.
“We are looking forward to economic improvement for everyone in the Inland Empire,” Hawkins says. “In the meantime, we are striving to assist our members by providing the products and services they need without all the added fees and disruptions that are becoming more common in the marketplace.”