A year ago, unemployment was 14% around the Inland Empirein California, much higher than the national average.

The $674.5 million Altura Credit Union felt the enduring stingas its members, like most across the nation, struggled with joblosses, rising debts and foreclosures.

Fast forward to 2012, the Riverside, Calif.-based credit unionis much more optimistic after its third-quarter financials revealedthat a recovery, while still slow, is making its way through theInland Empire, a region about 60 miles east of Los Angeles.

“Although conditions are still rough, our members have done agreat job digging out from under the area’s challenges,” said MarkHawkins, CEO of Altura. “They’ve reduced debt levels and restrainednew acquisitions. The market is slowly improving, but thehunker-down mentality lingers.”

For the quarter ending Sept. 30, Altura reported an increase inits net worth ratio to 9.42%, the highest in its history, accordingto the credit union. This is above the 6.89% reported for third-quarter 2011, and above the 8.69% reported in second-quarter 2012,Altura said.

The record net worth ratio is the result of a lot hard work by alot of people, Hawkins pointed out. The key contributors were muchthe same as Altura has seen over the past six quarters: reducedoperating costs and strong noninterest income coupled withdeclining loan delinquency and charge-offs, he added.

Hawkins acknowledged there hasn’t been any kind of magic bulletto Altura’s recovery, saying it’s been about paying attention toeach of these key factors that have contributed to the grudginglyslow recovery that’s taking shape.

“I attribute our recovery to the efforts of those people and tothe tough decisions we had to make to get through the toughesteconomy in 80 years. In short, I would attribute our success tohard work and good fortune,” Hawkins said.

Year to date, Altura said it is ahead of the same period last year, reportingnet income of $13.2 million for 2012 compared to $4.9 million for2011.

Despite a positive turn in its financials, Altura took a hit toits net income due to a $1.8 million impairment charge related toan investment in Business Partners LLC, a business lending CUSOfounded by Telesis Community Credit Union.

Net income dropped to $2.1 million for the quarter ending Sept.30, according to the credit union. This was down from the $3.4million 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 subsequentlyacquired by the $1.3 billion Premier America Credit Union, alsolocated in Chatsworth.

Founded in the 1995 by Telesis, BusinessPartners said it is owned by 17 financial institutions and hasmore than $1.1 billion in business loans under management.

“It’s really just a sad story,” Hawkins said. “I think it’s fairto describe the Business Partners venture as a great idea that waspoorly executed. Such a script just doesn’t end well.”

Hawkins said at Altura, it became evident the credit union’sinvestment was impaired, and as 2012 advanced, the cooperativeconcluded it was time to act.

“We wanted to put the impairment behind us and the timing seemedappropriate. We could absorb the hit in the third quarter, and wereally wanted to get this particular saga behind us,” Hawkinsexplained.

Still, Altura continues to believe that member business lendingneeds to be an important component of any credit union’s futurelending strategies and it certainly is for Altura, Hawkinsnoted.

“We remain a 5% owner of BP–our 5% is just worth less. We lookforward to resuming our member business lending, and we lookforward to a renewed, reconfigured Business Partners.”

Meanwhile, the Inland Empire still has a way to go in terms ofits recovery from the Great Recession.

“People in our area are very anxious about the upcomingelections, both at the national and state levels. Educators andcity and county workers comprise much of our field of membership.Each of these key groups remains under the gun so to speak of localgovernment budgets, which are full of uncertainty,” Hawkins said.“It remains a troubling time, but our members and Altura are eachmaking great progress.”

Indeed, the region continues to be hampered by highunemployment, currently at 12% as of September. This is anoticeable improvement compared to 2011’s 14%. Compare that to 2006when the rate was 4.5%, according to Hawkins.

The double digit unemployment figures demonstrates not only thedepth of the hole that Altura is still climbing from, butalso how hard this region was hit by the recession, Hawkinssaid.

“We’re coming back and that we’re not alone. There are manycredit unions here in the Inland Empire and up through the centralvalley of our state that have really been hit hard,” Hawkins said.“We’re all getting better, just at different speeds. It may takesome of us a little bit longer but we’re going to get there. Youcan count on it.”