Credit unions see better times in second quarter

Is profitability a sign of an economic recovery? Most credit union executives in Las Vegas would cautiously say yes using their quarterly and six-month earnings to support their answer.

One Nevada Credit Union, Silver State Schools Credit Union and Clark County Credit Union all posted profits in the second quarter of the year. They are issuing more home and automobile loans, while default rates decline.

“We feel really good about where we are positioned right now,” Wayne Tew, president and CEO of Clark County Credit Union, said in an earnings report. “For the first half of the year, we’re seeing financial numbers not seen since 2007.”

The credit union reported net income of $2.3 million in the second quarter. The institution has assets of $496 million, four branches and 33,000 members.

Tew said delinquency is down and loan growth is up for the first time in six years.

“We anticipate steady, positive circumstances for the next few years, at least,” Tew said. “We are definitely seeing the economy stabilize on our end.”

Silver State Schools Credit Union noted its fifth straight profitable quarter.

The $655 million credit union posted second-quarter net income of $7.48 million and year-to-date income of $8.65 million. The results reflect a $5 million, one-time nonoperating gain, according to a Silver State Schools executive.

Excluding the one-time gain, Silver State Schools earned $2.48 million in the quarter and $3.65 million year-to-date, compared with net income of $1.18 million and a year-to-date loss in 2012 of $2.27 million.

Loan delinquencies declined $10.6 million from $27.6 million in the second quarter of last year, to $17 million this year. Loan loss for the first half of 2013 is $2.9 million, compared with $10.4 million in the year-ago period.

“There are strong indications that conditions are steadily improving in Las Vegas,” said Andy Hunter, CEO of Silver State Schools.

It’s a similar story at One Nevada Credit Union, which reported net income of $3.6 million for the first six months of 2013. The profitable first half is a strong turnaround from the $590,051 loss One Nevada posted in the same period last year, and the $2.13 million loss for the same period in 2011.

“Even though the local economy remains sluggish, we continue to make sound financial progress,” said Brad Beal, president and CEO of One Nevada.

Whether the trend of profits continues, observers will have to wait until early October when credit unions issue third-quarter earnings.

NEWS & NOTES

Navy Federal Credit Union has opened its second branch in Southern Nevada. The Vienna, Va.–based financial institution last month opened a new branch along the perimeter of the Galleria at Sunset mall in Henderson.

Navy Federal already operates a branch at The Grove Shopping Center in North Las Vegas.

“The main driver behind our decision to open a branch in Henderson is added convenience for our members,” said David Talamas, regional manager at Navy Federal. “With a significant number of military retirees and military families in the area, current and future members in Henderson will be well served by the new branch.”

Navy Federal has $54 billion in assets, 4 million members, 231 branches and more than 11,000 employees worldwide.

• • •

Cathay General Bancorp is a relatively new name to Las Vegas. The Los Angeles-based bank holding company of Cathay Bank reported second-quarter net income of $29.9 million, or 35 cents a share, results that were in line with analyst’s expectations.

Cathay General entered Las Vegas in the second quarter with its acquisition of $40 million of deposits and the branch at 6110 Spring Mountain Road from SWNB Bancorp Inc.

SWNB Bancorp sold its single office of the $44 million-asset Nevada National Bank. Terms of the deal were not disclosed.

SWNB Bancorp announced in April it would sell the struggling bank. The company operates the $340 million asset Southwestern National Bank in Houston.

Before Cathay General could close the deal it needed to clear a few regulatory hurdles.

The Federal Reserve Bank of San Francisco in April terminated Cathay General’s memorandum of understanding, which had prohibited the company from making capital distributions.

Cathay General in March repaid $129 million, or about half of the money it received through the Troubled Asset Relief Program.

• • •

Cardtronics Inc., the largest retail ATM owner in the nation, has launched a program that allows credit unions, banks and other financial institutions to add their logos to the network’s fee-free ATMs.

Cardtronics is the parent company of the surcharge-free Allpoint Network, which has 43,000 ATMs.

The new program, dubbed Preferred Branding, will allow up to nine credit unions and other financial institutions to add their logos to a preferred brand decal on the front of the ATM, even if another financial institution already has its logo on the credit union’s top and screens.

Cardtronics will also “facilitate the transfer of ATM location data into ATM locater tools to help consumers find all their bank’s or credit union’s fee-free ATMs,” the company said.

Cardtronics said financial institutions have already added their brands to 19,000 of its ATMs.

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