A reduction in overhead expenses was the largest contributing factor to Business Partners LLC being profitable for the first three months of 2013, the member business lending CUSO said Monday.
According to officials, the organization analyzed multiple areas to cut costs.
“In many ways, Business Partners is redefining itself by getting back to basics. We have a very strong capital position so we can reinvest in the business by making improvements in technology, while at the same time making significant improvements to our balance sheet by reducing expenses,” said Dave Maus, president/CEO of the $1.2 billion Public Service Credit Union in Denver and board chairman of Business Partners in Chatsworth, Calif.
These moves have allowed the CUSO to focus more on expanding its participation levels and commercial real estate lending services for credit unions, Maus added.
Additional moves included the formation of a credit review committee, consisting of the chief lending officers from Business Partners’ primary owner-credit unions, the CUSO said. Their main responsibility is to ensure that each loan originated through Business Partners meets particular lending criteria.
In November, Business Partners announced three new principal owners of the CUSO. In addition to Public Service CU, the $610 million Farmers Insurance Group Federal Credit Union in Los Angeles and the $523 million Great Lakes Credit Union in North Chicago, Ill., are now the lead shareholders. The CUSO now has 15 credit union shareholders.
“Every loan is reviewed to ensure risk tolerance levels comply with BP’s guidelines, which provides our participants with an extra layer of support in their underwriting process,” Maus said.
Business Partners also said that the NCUA had reached an agreement to sell its controlling interest to a managing partner group consisting of the three principal owner credit unions. The price was not disclosed.
The CUSO said it serves more than 150 financial institutions in 40 states.
Founded in 1995 by the now-defunct Telesis Community Credit Union, for much of 2012, Business Partners had been operating under the management of the NCUA after the regulator was appointed the conservator of Telesis last March shortly after the California Department of Financial Institutions shuttled the troubled credit union into conservatorship.