For North Island Credit Union, 2011 was a year of significant milestone achievements in its quest toward a financial turnaround.
When talking about his credit union’s milestone achievements in 2011, North Island ($1.1B, San Diego, CA) CEO John Tippets draws a parallel to mountain climbing.
“Often in pursuit of scaling a major peak, climbers will feel exhilaration as they conquer certain intermediate altitudes or milestones in their quest,” Tippets says.
Indeed, here’s a quick rundown of the progress the credit union is making in its continuing turnaround:
- In the first quarter of 2011, the credit union hit a major benchmark of attaining a 6%, or adequately capitalized, net worth ratio. It then continuously improved its net worth over the next eight months, and at year end hit a well-capitalized number of approximately 7.3%.
- For the past couple of years, North Island has been under legislative and regulatory Prompt Corrective Action (PCA) requirements and a tightly monitored net worth restoration Plan. The credit union’s 2011 performance exceeded the regulator’s expectations and as the credit union enters 2012, it will no longer be subject to PCA.
- North Island more than doubled its 2011 net income projections, hitting $4.2 million, and with the reversals of excess reserves it will report a net income of $17.8 million. “Great work by the asset management team in reducing loan losses, and with Legal, in achieving a remarkable $2.0 million in recoveries,” Tippets says. “Those successful efforts significantly contributed to the lower required provision for loan losses and to the reversals of the excess reserves.”
And who has benefited from the credit union’s success? Its members. The credit upgraded its ATMs and rolled out new and enhanced products, including a rewards MasterCard and home equity loan. In recent weeks, the credit union has adjusted its rate and underwriting with the goal of improving the availability of its auto and unsecured loans.
But it’s not just members that are receiving North Island’s love. During the past year the credit union recognized its employees’ hard work and dedication through a team award for credit union performance and at mid-year it reinstated its 401K contribution match.
“North Island’s progress over these past couple years was recognizable in the results of our latest regulatory examination,” Tippets says. “When it was completed, I took the occasion to visit with several staff groups who had contributed to the positive examination report, which truly was a product of everyone’s doing.”
So where does that mountain climbing parallel apply? For one, to the challenges the credit union still faces.
“The economy remains a great obstacle and only modest improvement can be expected,” Tippets says. “Housing prices and unemployment are not likely to show much recovery which will consequently impact North Island in the form of continued loan losses.”
But Tippets remains optimistic. He is confident his staff’s talents and the credit union’s other resources will allow it be creative and industrious in its continued efforts to improve North Island’s financial results and enhance the returns to all its credit union constituents.
“Working together,” Tippets says, “The Island team will be successful.”