Federally insured credit unions post record profits in '12


It’s been a very good year for credit unions.

The National Credit Union Administration found the industry posted $8.5 billion in profits las year, a record for federally insured credit unions.

“Credit unions had a pivotal year in 2012,” said Debbie Matz, NCUA board chairwoman. “The industry generated record earnings; assets crossed the $1 trillion mark; and membership grew by more than 2 million.”

Matz said the industry’s net worth ratio rose to 10.44 percent and delinquencies continued to decline. The administration report also found lending grew by 4.6 percent, as more people sought loans to buy homes, cars or go to school.

The record $8.5 billion in net income represents a 36.1 percent increase from the $6.3 billion reported in 2011, the administration said. The increase came largely from reductions in loan losses, a sign of improving economic conditions.

Federal credit unions reported $597.7 billion in outstanding loans as of Dec. 31, a 4.6 percent increase for the year. First mortgage real estate loans increased 5.7 percent for the year to reach $246.3 billion.

Used-car loans rose 7.9 percent for the year to $115.2 billion, while new-auto loans grew 8.7 percent to $63.3 billion, the administration said.

Net member business loans increased 6.5 percent in 2012 to $41.7 billion.

“There are many reasons to be optimistic about the credit union industry’s future,” Matz said. “But, because of today’s low interest rates, we also continue to keep a close eye on fixed-rate mortgages, which remain elevated as a share of assets and could pose a long-term risk for the industry.”

Credit unions had a 35.6 percent jump in private student loans, exceeding $2 billion for the first time. Alternative or payday loans reached $21.3 million last year, up 15.2 percent.

Growth was most robust in credit unions with assets above $250 million. This group of 751 credit unions showed the largest gains in nearly every category, including membership, net worth, market share, loans and assets.

On the other hand, smaller credit unions tended to have higher net worth, but showed slower growth. Credit unions with assets under $10 million had a loss of overall membership and sluggish loan growth compared to credit unions with assets above $250 million, the administration said.

“The composition of the credit union industry is changing, which presents challenges,” Matz said. “Small credit unions are important to their members and their local economies.”

Matz said it’s the administration’s job to “monitor their health and, to the extent possible, find ways to keep them sustainable.”

As of Dec. 31, federal credit union membership stood at 93.8 million. Matz said industry consolidation continued last year, as the number of federally insured credit unions fell by 275 from 7,094 to 6,819.

Total assets were slightly more than $1 trillion, the administration said.

NEWS & NOTES

Brent Edward Lovett is scheduled to be sentenced May 29 after a jury found him guilty of bank fraud. Lovett is facing 30 years in prison and a $1 million fine for scamming Logix Federal Credit Union out of $.5 million by providing false information to obtain loans.

At the time Lovett was indicted in 2006, Logix was known as Lockheed Federal Credit Union.

Through his company, Bay Resorts International, Lovett leased two commercial buildings in Las Vegas. Through Equity Resource Inc., another of his businesses, Lovett purchased the buildings for $10 million using a loan secured from the credit union.

According to the indictment, Lovett apparently made false statements to Lockheed FCU on his loan application involving Bay Resorts.

After he obtained the loan, Lovett let the building fall into foreclosure and kept approximately $1.3 million for himself, the indictment said.

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Nevada State Bank and its parent company, Zions Bancorporation, were recognized recently in a survey conducted by Greenwich Associates for excellence among the nation’s top banks for both small- and middle-market banking.

The 13 awards include 10 national awards and three regional awards. The Greenwich awards are based on more than 40,000 market research interviews with companies nationwide.

“We are honored to have been recognized once again in the Greenwich Excellence Awards for our treasury management products and banking services,” said Cassaundra Johnson, senior vice president and director of sales at Nevada State Bank.

Nevada State Bank has more than $4 billion in assets and 50 branches statewide.

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Elliot Jaffee has taken over U.S. Bank’s commercial banking division, overseeing some 550 employees across 25 states, including Nevada. Jaffee succeeds Las Vegas resident Kenneth Ladd, who recently retired after 30 years with U.S. Bank.

 

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