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After years of growth, the county’s largest credit unions were held to a 1% increase in assets as their customers dealt with a shaky economy.
The 31 largest credit unions based here grew assets 1% to nearly $13.2 billion for the 12 months through June, according to this week’s Business Journal list.
Without No. 1 Santa Ana-based SchoolsFirst Federal Credit Union, which dominates the list with 60% of its assets, the 30 largest credit unions based here grew assets by 2.7% to $5.2 billion.
A year ago, the group’s assets increased by 9%—and in the prior year by 10%.
The list ranks credit unions by assets including cash, loans, real estate and securities.
financial information comes from the California Department of financial Insti-tutions and the National Credit Union Admini-stration.
Some of the lag on asset growth was caused by a membership drop at the credit unions, which shrunk by 1%, or more than 8,000 people, to 778,333 in the past year.
Officials blame some of the drop on lower demand for loans, as people historically join credit unions for single transactions. Like many Banks in the county, credit unions made fewer loans and set aside more cash to protect against potential bad loans in the past year.
Credit unions are not-for-profits that provide banking services to members who share a common bond, whether it’s place of employment, profession, religion, ethnicity or another affiliation.
While many credit unions avoided over-extending themselves with lending the way some Banks did, they’re still vulnerable to problems with loans going bad, a lack of funding and a falloff in borrowing.
Net income for the group for the six months through June was down about 94% to $2 million from $32 million a year earlier, with 25 of the 31 credit unions reporting losses.
Through low-profile marketing they compete with banks and thrifts by trying to offer lower rates and fees on loans, while offering higher returns on deposits.
Many rely on referrals for growth.
Fifteen of the credit unions showed gains in assets for the 12 months through June, 13 posted declines and three were flat, including the largest: SchoolsFirst Federal Credit Union.
The list reflects recent consolidation in the industry, as there are eight fewer credit unions on this year’s list. Of these eight missing credit unions, four were sold, one closed down and one moved to Long Beach. Data was not available for two.
There were no changes in ranking of the top five.
Top of List
SchoolsFirst continued to dominate the list with $8 billion in assets.
The credit union is the largest lender and deposit institution of any type based in OC. It takes the title after Newport Beach-based savings and loan operator Downey Finan-cial Corp. failed last year.
As of the end of last year, it was the fifth largest federally insured credit union in the U.S., according to the National Credit Union Administration.
SchoolsFirst added 105 employees in the past 12 months for a 12% gain, which brought its total to 962. That increase offset losses at other credit unions as total OC employment increased by 82 positions to 2,216.
SchoolsFirst, which formerly was Or-ange County Teachers Federal Credit Union, also added 9,913 members for a total of 410,634.
The new members helped boost net income, which was up nearly 8% to $24.6 million.
No. 2 Evangelical Christian Credit Union in Brea posted a 2% gain in assets to nearly $1.3 billion.
It lost nine workers for a nearly 3% decrease to 297 as membership fell by 4.5% to 11,372.
The credit union, which specializes in loans to churches, saw its net income nearly cut in half to $6.3 million.
No. 3 Orange County’s Credit Union in Santa Ana grew its assets by nearly 3% to $946 million.
Thirty-two workers were added—for a total of 287—to run two branches the credit union opened.
The credit union saw less traffic from people joining only to take advantage of single loans, which were often advertised by a third party such as a car dealership, it said. As a result, its membership fell 5% to 79,000.
It also posted a loss of about $485,000 for the six months through June as it put money aside to handle bad loans, but it since has been profitable, according to the credit union.
It also had to pay a $2 million fee to the National Credit Union Administration, which is charging credit unions to help build its relief fund back up, much like its bank counterpart the Federal Deposit Insurance Corp.
The credit union expects to see a turnaround by offering home loans through the Federal Housing Authority, according to Chief Executive Shruti Miyashiro.
“We’re not fighting for survival,” she said. “We’re seeing a lot of confidence from members over our stability.”
No. 4 NuVison Federal Credit Union in Huntington Beach grew its assets by more than 3% to $873 million.
Some of that gain comes from taking over Costa Mesa Federal Credit Union, which had less than $20 million in assets last year.
Meanwhile, it posted a loss of $1.5 million for the first six months of the year—a big drop from the $1.2 million profit it posted a year earlier.
Loss
No. 5 American First Credit Union in La Habra saw its assets fall by more than 6% to $634 million. It was the only credit union in the top five to see a decline in assets.
It recorded the largest loss in net income on the list, losing $9.1 million in the six months through June, widened from a loss of $3.9 million a year earlier.
It also shed 15 workers to bring its total to 151 as its membership was off by more than 12% to 64,532.
No. 7 Eagle Community Credit Union in Lake Forest moved down a spot from last year as it struggled with bad auto loans, which make up 60% of its business.
Its assets fell by 4% to $199 million.
While its workforce held steady at 69, its membership dropped by more than 2% to 24,731.
The credit union registered a loss of $3.4 million in net income for the first six months of the year, but it had planned for the loss with a $3.3 million reserve, according to Chief Executive Bill Birnie.
Despite the defaults on auto loans from borrowers who lost their jobs, Birnie says things have been on the mend.
“It’s been a thorn in our side, but things are improving,” he said.
To save on expenses, its workforce took a 10% pay cut for the year, with Birnie and a senior vice president taking 15% cuts.
Mortgages have been one of its stronger businesses. It also began offering credit cards.
Rounding Out List
No. 8 Sea Air Federal Credit Union in Seal Beach posted the largest percentage increase in assets. It was up 38% to nearly $192 million, bumping it up a spot on the list.
The biggest percentage loss in assets came from No. 14 Tenet Credit Union in Los Alamitos, which shed more than 18% to $55 million.
No. 19 California Agribusiness Credit Union, which had a 15% decrease in assets to $27 million, took over Yamaha Employees Federal Credit Union, which had less than $5 million in assets last year.
First American Federal Credit Union in Santa Ana, which had less than $30 million in assets last year and Pacific Coast Credit Union, which had less than $20 million, were taken over by credit unions based outside the county.
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