Looking at its consumer lending success dating back to a least 2004, Texans Credit Union is hoping those types of loans will help with its comeback.
Keith Morton, NCUA Region IV director, told Credit Union Times there is a strategic effort to focus on consumer lending at the $1.42 billion credit union that has been in conservatorship since April 2011. Morton is also the agent for the conservator.
“It was working up until 2004. The strength was in consumer lending,” Morton said. “We’re taking actions to refocus.”
The Richardson, Texas-based credit union is no longer offering commercial loans and there are no foreseeable plans to go down that route again, Morton said. Texans was plagued by millions of dollars in commercial loan losses.
The NCUA recently reported Texans had year-to-date net income of $5.87 million and $1.48 billion in assets, up from $1.42 billion at year-end 2011. The agency said the credit union’s net worth also improved by 35 basis points during the first three months of 2012, ending the first quarter at 1.42%.
Morton said this first quarter was the first time Texans had turned a profit since 2007. To help reach that milestone, more than $20 million in expenses were cut and five of the credit union’s 19 branches were closed. In the back office, among other divisions, redundant operations were eliminated, he added.
“We’re hitting targets,” Morton said. “We still have a lot of challenges as you would expect with a conservatorship, but we’re pleased with where we’re at.”
The NCUA provided Texans with $60 million in subordinated debt late last year to help stabilize its finances.