The once-failed $172 million Mutual Savings Credit Union of Birmingham, Ala., is again sharing its turnaround story, using its annual meeting this week to tout income gains and what its CEO called “a grit your teeth performance.”
“We’re not out of the woods yet on some bad loans but I am so pleased that we have come this far,” declared Douglas Key, who was brought in as president after NCUA and Alabama regulators seized Mutual in a July 2009 conservatorship.
Under the helm of Key, a Birmingham lawyer who had been outside counsel, the CU which lost $5.9 million in 2009 emerged from the conservatorship a mere 10 months after it was taken over. It turned a $724,000 profit last year and made $197,000 in the first quarter this year, Key said.
“We’ve actually earned money in 15 out of the last 16 months and I attribute that to a cost-control program, a seasoned staff doing its job and some luck considering the Alabama economy is not bad as say Nevada or Arizona,” he said.
Mutual, which Key said has been dubbed locally as the “little credit union that could” has a net worth of 6.6% and its work cut out for it reducing bad debts from defaulted business loans made under the prior administration.
At Tuesday’s annual meeting, which Key described as “low key”, Mutual cut out the door prizes and other frills to demonstrate board and management determination to enhance the balance sheet, said Key.
In 2009 Mutual was gripped by controversy, including lawsuits over charges of mismanagement and out-of-control spending that resulted in a state court settlement of the claims.
The CU, which cut staff and closed two branches including one last month in Trussville, was initially taken over by former Alabama state CU administrator Glenn Latham. He recruited a new management team that hired Key.