Net income dropped at Altura Credit Union due a $1.8 million impairment charge related to an investment in Business Partners LLC, a business lending CUSO founded by Telesis Community Credit Union.
The $674.5 million credit union in Riverside, Calif., said net income dropped to $2.08 million for the quarter ending Sept. 30. This was down from the $3.37 million Altura reported last year at this time on total assets of $679.4 million.
The Chatsworth, Calif.-based Telesis was conserved by the NCUA in March and was subsequently acquired by the $1.3 billion Premier America Credit Union, also located in Chatsworth.
Founded in the 1995 by Telesis, Business Partners said it is owned by 17 financial institutions and has more than $1.1 billion in business loans under management.
Besides the impairment charge, Altura said its net income also decreased because of the NCUA’s Corporate Stabilization Fund Assessment of $589,000.
Year to date, Altura said it is ahead of the same period last year, reporting net income of $13.172 million for 2012 compared to $4.9 million for 2011.
In addition, for the quarter ended Sept. 30, 2012, Altura reported an increase in its net worth ratio to 9.42%, the highest in its history, according to the credit union. This is above the 6.89% reported for the third quarter in 2011, and above the 8.69% reported in the second quarter of 2012, Altura said.
“This has been a solid year of net income growth for us, and we are very pleased with our third-quarter results despite the charges we took in September,” said Mark Hawkins, CEO of Altura, which is located in the Inland Empire, a region about 60 miles east of Los Angeles.
The Inland Empire region of Riverside and San Bernardino counties suffered substantial job losses and foreclosures during the worst of the Great Recession, however, the region has been recovering slowly, Altura said.
California’s jobless rate has remained above the national average, most recently reported at 10.2%, with the Inland Empire lagging behind at 11.6% with Riverside County at 12%, according to the credit union.
“We began to see the early signs of recovery last year, and it has continued to expand throughout 2012,” Hawkins said. “It’s not yet where we would like it to be, but the improvement is steady and ongoing. That fact, together with our sustained emphasis on cost savings, is making 2012 our best year in our 56 years of operation.”