Auto Lending Helps Altura CU Post Strong 2012 Financials
An increase in auto lending activity combined with a reduction in ongoing expenses and set-asides for loan losses has helped Altura Credit Union double its net income in 2012.
The $655.3 million credit union in Riverside, Calif., reported net income of $17.49 million for the year ended Dec. 31, 2012. This is more than double the net income of $8.43 million reported at the end of 2011, according to Altura.
“This is without question the best year in Altura’s history,” said Mark Hawkins, CEO of Altura. “Historically, Altura has had many good years, but that was not the case during the Great Recession. So, it is very exciting to be able to report such positive results after that period of difficulty.”
Altura implemented a number of steps to reduce its operating expenses over the past five years, including closing branch locations, Hawkins said.
“In 2012, our expenses were the lowest we have recorded since 2002. This has not been without a price. Some cutbacks impacted our members, such as closing branch locations. But the end result is that our financial position today is much stronger than it has ever been,” he said
The credit union also reported a net worth ratio of 10.36% at the end of 2012, the highest in its history, according to Altura. The credit union said this is above the 10.22% national average for credit unions of Altura’s size. At the end of 2011, Altura reported a net worth ratio of 7.84%.
For the year ended Dec. 31, 2012, Altura also reported net income of $17.49 million on assets of $655.3 million. This is compared to net income of $8.43 million on assets of $642.9 million for the year ended Dec. 31, 2011.
Assets increased 1.9% over 2011, which is the first increase in Altura’s asset size since 2007, according to the credit union. Hawkins said this is on target with Altura’s 2012 goal of a 2% increase in assets.
Although Altura said it is proud of its 2012 financial results, the news is tempered by an ongoing lack of consumer confidence in general as well as continued slow job growth in the Inland Empire.
“Property values in this area are coming back pretty aggressively right now and that’s good news,” Hawkins said. “But the unemployment rate is still significantly above state and national averages at 11.1%.”
Consumers continue to be concerned about what is happening in the marketplace; their focus remains on paying down debt, the Altura CEO said.
“So, our lending growth still has a ways to go. Yet, we clearly see improvement, particularly in auto lending,” Hawkins noted.
Altura said its financial position was also strengthened by the launch of several new products in 2012 including Reliance Checking, which was developed to assist individuals who have had financial difficulties like unpaid accounts and negative history reported to ChexSystems.