Nader Moghaddam, president/CEO of the $710 million Financial Partners Credit Union has a message about all that California gloom and doom: Credit Unions are overcoming the challenges and have become creative managers.
"My message from one of the hardest hit areas of the country: We've all been whitewater rafters thrown about by uncontrollable waves but in these turbulent times, we've learned how to succeed," declared Moghaddam.
Indeed, in one area-mortgages-the Downey, Calif., credit union has made major strides, originating $240 million in first mortgages and selling 94% to the secondary market during 2009, said Moghaddam.
"Over the last nine months the credit union improved its fee and other noninterest income by 21%, currently standing at 1.64% of assets," said Moghaddam. "A key contributor was the successful development of the mortgage banking operations," with 2009 momentum continuing in 2010 .
Financial Partners also anticipates the investment advisory side of the credit union, with over $150 million in assets under management, will increase its year-over-year net income by 24%, he said.
And while the last three years have been horrendous for California CUs, Moghaddam in using a rafting metaphor, maintained that though "the river is flowing so violently that at times it seemed futile to try and steer the raft," CUs like his are finding ways to become more innovative than in the past,
In some cases, he said, "We've had to recreate the organization," noting that the end result has been that Financial Partners, for one, has a higher than peer loan-to-share ratio at 81.7% and lower than peer delinquency and charge-off performance.
"With positive year-to-date income of $2.5 million as of September, our net worth currently at 7.90% has been stable and growing," he said.
Mohagaddam made his comments as the Los Angeles CU completed a merger this month of the nearby $12 million Santa Fe Springs City Employees CU. The Santa Fe Springs CU chartered in 1961 and with 1,100 members had sought out Financial Partners as suitor feeling it was in its best long term interest to seek a merger.
Mohagaddam said there are no current plans for other mergers but the Santa Fe Springs consolidation does fit into Financial Partners' strategy of being service oriented.
Despite Financial Partners recent success, he concluded, "it doesn't mean the storm has passed."