Orange County’s credit unions continued a trend of asset and membership growth during the past year.
The 43 OC-based credit unions on this week’s Business Journal list reported $10.4 billion in assets at the end of June, up 10% from the $9.4 billion they reported a year ago.
Local membership at the credit unions rose 2% to about 610,000 in the period.
The list ranks all credit unions with OC headquarters by assets. Assets, which include cash, loans, real estate and securities held by the bank, are taken from the California Department of Financial Institu-tions and the National Credit Union Administration. The Business Journal expanded this year’s list by 15 credit unions.
Credit unions are not-for-profit institutions that provide banking services to their members. Borrowing rates and fees usually are lower than their bank counterparts, while rates on deposits are higher.
Net income is given back to members through rebates or bonuses. Profit margins are slim. At $66.1 million, net income for the 43 credit unions’ first six months of 2005 was just 0.63% of total assets, down 5% from a year ago.
The list’s heavy hitter, Orange County Teachers Federal Credit Union in Santa Ana, continued its dominance as the county’s No. 1 credit union.
Orange County Teachers reported nearly $5.7 billion in assets at June 30, a 14% climb versus a year earlier.
The teachers’ credit union dwarfs the other 42 credit unions, accounting for 55% of all assets held by OC-based credit unions.
The teachers’ credit union is the fifth-largest federally insured credit union in the U.S., according to the National Credit Union Administration.
Net income at the teachers’ credit union grew 14% to $46.6 million in the six months ended June 30. The credit union, which caters mainly to school employees and their families, accounted for more than 70.5% of all profits at OC-based credit unions in the past year.
Membership in the credit union grew 3% to 240,000 in the period.
No. 2 Santa Ana-based Orange County’s Credit Union saw its assets grow 3% to $781.6 million during the past year. The credit union has 259 workers at its eight county branches.
Net income at Orange County’s Credit Union declined 16% to $2.6 million in the past year. Local membership fell 6% to 73,429.
No. 3 Brea-based Evangelical Christian Credit Union climbed a spot on the list. It reported $720.8 million in assets, a 19% increase compared to last year, making it the fastest-growing credit union among the county’s bigger institutions. Profit at the credit union rose 38% to $6.1 million.
The credit union offers corporate investment and other financial services to churches, schools and ministry services, an area that spokeswoman Kristine J. Watson said is generally underserved by banks and financial institutions.
The credit union has about $1.8 billion in total assets under management, including an investment banking arm that uses “biblically-based investment management principles.”
It boasts roughly 10,000 consumer members with the remainder listed as corporate clients.
“We still have a consumer base, but we do not offer auto or mortgage loans,” Watson said.
Fifteen credit unions on the list posted a decline in assets, though none ranked in the top 10. Twenty-six had an increase in assets with two reporting no change.
Overall, the credit unions employed 2,268 workers in OC, up about 1% from last year.
Credit unions could see some changes on the mortgage lending front.
JoAnn Johnson, chairman of the National Credit Union Association, told the Business Journal she has concerns about some credit unions not lending according to “safe and sound” practices. At the same time, she also is pushing for more mortgage lending to underserved communities.
“Credit unions currently do a small portion of the mortgages, about 2% (of loans nationally),but we are looking to step that up,” Johnson said.
Johnson, 56, recently issued a letter to the nation’s credit unions urging them to be mindful of solid underwriting practices, making sure that credit standards and asset liability management practices are in place.
“We need to make sure we’re doing sound underwriting,” she said.
Rudy Hanley, president and chief executive of Orange County Teachers Federal Credit Union recently was part of an industry group that proposed a nationwide mortgage program aimed at helping low-income borrowers afford their first home.
The loan program, which will provide low-interest, adjustable-rate mortgages with low closing fees, has raised nearly $1 billion in commitments from the nation’s credit unions.
Hanley, whose credit union committed $60 million to the program, was one of a handful of industry executives tapped to help create the program.
