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SchoolsFirst’s Growth Lifts Local Credit Unions

The 35 largest credit unions operating in Orange County combined for a 2.5% growth in assets, to $14.6 billion, for the 12 months through June, according to this week’s Business Journal list.

That follows an increase of 3.6% a year earlier, and 1% the year before. Prior to 2009, OC credit unions typically saw increases in assets of about 10%.

Credit unions are member-owned financial cooperatives that operate as nonprofits. Their earnings are returned to members, typically in forms of lower fees and loan rates.

The recent growth in assets—as well as increases in OC employees and members— was led by top-ranked SchoolsFirst Federal Credit Union (see related story, page 30).

The rest of the field had mixed results.

Santa Ana-based SchoolsFirst accounted for about 60% of the total assets of the credit unions on the list. Its assets rose by 4.6%, going to $8.8 billion from $8.4 billion a year earlier.

Without SchoolsFirst, the rest of the group saw a drop of about 1% in assets, shedding $34.8 million collectively.

18 credit unions reported increases in assets, while 17 saw their assets drop.

Net income for the credit unions on the list more than doubled for the six months through June to $34.6 million, the most recent data available.

SchoolsFirst accounted for the bulk of the gain in net income, with a 64% increase to $32.9 million. The rest of the companies listed combine for net income of $1.7 million, swinging from a collective loss of $3.3 million for the same period a year earlier.

28 had net profits for the first six months of the year; seven reported losses. Among those that were profitable were 13 that showed losses at the same point last year.

The credit unions on this year’s list combined for a decrease in employment of about 1% to 2,322.

SchoolsFirst added 42 workers, for a total of 1,015. Six other credit unions added jobs, 11 reported reductions, and another 14 held even from the prior year. Three were flat based on Business Journal estimates.

Membership Up

Membership for the listed companies rose by a total of 3.8% to nearly 870,000.

SchoolsFirst saw a 9.6% increase, adding 42,810 members for a total of more than 491,000. The rest of the field combined for a 2.9% decrease to almost 380,000.

Huntington-Beach based NuVision Feder-al Credit Union moved up one spot from last year’s list to No. 2.

NuVision’s assets were nearly flat at about $1.2 billion. It had net income of $5 million in the first two quarters, reversing a $1.2 million loss in the year-earlier period.

Combination

NuVision earlier this year announced plans to join with Manhattan Beach-based Kinecta Federal Credit Union.

The combined organization will retain the Kinecta name and charter, which has $3.5 billion in assets. A vote on the merger is expected in the second quarter of next year, according to NuVision spokesperson L.J. Tarman.

No. 29 Southland Savings Federal Credit Union in Buena Park grew its membership by more than 1,700 people for a total of 2,800.

Chief Executive David Kantar attributes that growth to the “next generation coming in.” Southland Savings grew its assets by 1% during the 12 months through June, and added 10 employees for a total of 14.

Southland Savings saw a loss of about $47,000 despite the growth in membership and jobs.

“Severely Challenged”

Kantar said the credit union was “severely challenged due to the federal government’s mandatory withdrawal of our reserves for their stabilization programs for other financial institutions of the credit union industry.”

The money goes to the National Credit Union Share Insurance Fund, according to Kantar. Despite softened demand and stringent qualification criteria for loans, the credit union is “anticipating growth of about 11% to 12% for next year,” according to Kantar. “We have $5 million literally sitting there, ready to lend.”


Download the 2011 OC’s LARGEST CREDIT UNIONS list (pdf)

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