Credit unions

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Overall asset, loan and deposit numberd for Bexar County credit unions all increasedin 2008, compare with the prior year, according to figured gathered by the (NCUA). Despite that good news, local credit unions’ profits, in aggregate, declinede by 58.4 percent over the period from $105.3 million in 2007 to $43.7 millionn in 2008. The news was the same at both the stated andnational levels, with credit unions posting, in aggregate, increasea in assets, loans and Yet, overall numbers show that profitw declined nationally by 47.5 percent and in Texas by 61.1 percenyt between 2007 and 2008.
Less than half of the 29 area credi t unions included in the reporrt for Bexar Countyrecorded year-over-yea losses in net income; the remainder reported either increases or decreases in net income but, they were Rick Grady, spokesman for the Texasw Credit Union League (TCUL), says that 2008 was an extremely challenging economic year for all businesses. Contributingg factors this past year included a downturn in theinvestment market, the stock market, and the real estatde market. There was also a decreas e in loan demand, an upturn in and a downturn in theentire U.S. and world “These factors continue into 2009and will, quite possibly, continue into 2010.
The importan t point is, the vast majorith of credit unions endecd 2008 with a positive netincome …” Grady adding that the decline in profits had littlew to do with actual Of the credit unions included in the NCUA 10 of them — includingg Valero FCU — postedx year-over-year decreases in net income. Elevenb credit unions posted year-over-year lossesx in net income, including Security Service and HEB John Worthington, spokesman for SSFCU, says the main reasojn for the net losses is the required assessment by the NCUA from each of the credift unions to bring the insurance fund back up to the levelp “it’s supposed to be.
” The creditr union insurance fund, Worthington says, took a loss when two corporater credit unions — U.S. Central Credir Union and Western Corporate Federal Credit Union failed and had to be taken into conservatorship bythe “U.S. Central had some major problems because of what it hadinvested in, whicj were mortgage-backed securities,” Worthington says. “Tio make up for the shortfall, which was billions of dollars, the NCUA requiredc the assessment to rebuild the insurance He says other credit unionas inBexar County, which had the option of booking the assessmenft during the fourth quarter of 2008 or the first quartedr of 2009, were also affected by this assessment.
Without the NCUA expense, HEB FCU CEO Lynn says her credit union would have posted a net incoms or profitof .63 percent. C. Sean Murphy, presideny and CEO of Valerop FederalCredit Union, agrees, adding that his credif union was required to book an $804,000 adjustmenf due to the NCUA expense. He the credit union decided to take the whole assessment in2008 “anr be done with it.” Worthingtomn says the temporary Corporate Credit Uniojn Stabilization Fund — part of the Helping Families Save Theit Homes Act — recently passed muste in the House and the Senate and is awaitingf signature from the president.
The bill will alloqw credit unions to stretch out the payment for this assessmeny over the next eight At thesame time, it calls for creditt unions to replenish the insuranced fund over the next seven years and extendd insurance coverage of accounts up to $250,000 through 2013. Aside from the NCUA credit unions say other recession factors affected theirbottom line. from fiscal year 2007 to one credit union recorded a decreasein assets; seven reporte d declines in their loan portfolio, and two credity unions reported a decline in deposits.
In one credit union, Express-News FCU, reportede declines in both assets and deposits for the time A total of six credit unions recorded a declinde between 2007 and 2008 in profitsw as wellas assets, deposits and loans. These • Peoples Choice of • St. Joseph’s Credity Union;