TMG Financial Services made its first after tax profit from its purchased card portfolio, according to a letter the CUSO sent to investing credit unions.
"Our $18,274 net income after tax was ahead of our projection for profitability in August and demonstrates that we have achieved the scale necessary to be profitable on an ongoing basis," TMG Financial CEO Jeff Russell wrote in the April 28 letter. "The real story of our profitability was strong income from the portfolio, control of operating expenses and a stable contribution to our allowance for loan loss as charge-offs were lower than expected for March."
Russell cautioned that the CUSO might not see a profit every month going forward, but expressed optimism in the future.
"The CARD Act changed the dynamic of credit card issuing and has created challenges, but also benefits for issuers that treat consumers in a honest and straightforward manner. We have seen that in our growth--both through new card members as well as balance transfers from existing card members," Russell wrote.