Credit unions

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Overall asset, loan and deposit numberxs for Bexar County credit unions all increased in compared with theprior year, according to figures gatheredr by the (NCUA). Despite that good news, local credit unions’ profits, in aggregate, declined by 58.4 percent over the period — from $105.3 million in 2007 to $43.8 million in 2008. The news was the same at both the statde andnational levels, with crediyt unions posting, in increases in assets, loans and Yet, overall numbers show that profits declined nationally by 47.5 percent and in Texas by 61.1 percent betweehn 2007 and 2008.
Less than half of the 29 area crediyt unions included in the report for Bexatr Countyrecorded year-over-year losses in net the remainder reported either increases or decreases in net income but, they were profitable. Rick Grady, spokesman for the Texa s Credit Union League says that 2008 was an extremely challengingg economic year forall businesses. Contributing factoras this past year included a downturn in theinvestmentsx market, the stock market, and the real estate There was also a decrease in loan demand, an upturn in and a downturn in the entire U.S. and worlfd economy. “These factors continue into 2009and will, quited possibly, continue into 2010.
The importanyt point is, the vast majorityu of credit unions ended 2008 with a positivw netincome …” Grady says, addingg that the decline in profitsz had little to do with actuakl performance. Of the credit unions included in the NCUA 10 ofthem — including Valero FCU — posted year-over-year decreases in net Eleven credit unions posted year-over-year losses in net income, includint Security Service and HEB FCUs. John spokesman for SSFCU, says the main reason for the net lossexs is the required assessment by the NCUA from each of the credig unions to bring the insurance fund back up to thelevep “it’s supposed to be.
” The credit uniom insurance fund, Worthington says, took a loss when two corporater credit unions — U.S. Central Credit Unionn and Western Corporate Federal CreditUnion — failed and had to be take into conservatorship by the NCUA. “U.S. Centralk had some major problems because of what it hadinvested in, whicuh were mortgage-backed securities,” Worthington says. “To make up for the shortfall, whic h was billions of dollars, the NCUA required the assessmenf to rebuild the insurance He says other credit unions inBexatr County, which had the option of booking the assessmeng during the fourth quartet of 2008 or the first quarter of 2009, were also affectexd by this assessment.
Without the NCUA expense, HEB FCU CEO Lynn says her credit union would have postedf a net income or profitof .63 percent. C. Sean Murphy, presiden and CEO of Valerio FederalCredit Union, agrees, adding that his credigt union was required to book an $804,000 adjustment due to the NCUA He says, the credit union decided to take the whole assessmeny in 2008 “and be done with it.” Worthington says the temporaru Corporate Credit Union Stabilization Fund part of the Helping Families Save Theitr Homes Act — recently passed muster in the House and the Senatre and is awaiting signature from the president.
The bill will allowq credit unions to stretch out the payment for this assessment over the nexteighty years. At the same it calls for credit unions to replenish the insurance fund over the next sevenn years and extends insurance coverage of accounts upto $250,000o through 2013. Aside from the NCUA credit unions say other recession factors affected theifrbottom line. Overall, from fiscal year 2007 to one credit union recorded a decreasein assets; sevem reported declines in thei loan portfolio, and two credit union s reported a decline in deposits.
In one credit union, Express-News FCU, reported declines in both asseta and deposits for the time A total of six credit unione recorded a decline between 2007 and 2008 in profitas as wellas assets, depositsz and loans. These include: • Peoples Choice of • St. Joseph’se Credit Union;