Despite enduring its first quarterly loss in at least two decades in 2009, Numerica Credit Union has experienced strong growth in loans, deposits, and total assets, says Jennifer Lehn, the Spokane Valley-based credit union's executive vice president.
Numerica reported to the National Credit Union Association a first-quarter loss of $6.8 million, down from net income of $1.8 million in the year-earlier quarter. Lehn attributes the loss almost entirely to a charge-off of $6.3 million for an additional payment to the National Credit Union Share Insurance Fund, which insures member deposits.
Even though the credit union is financially stable, the premium assessment was required to replenish the insurance fund, which was created in 1970 to protect the deposits of credit union members nationwide, she says.
"Because we are a co-op we're having to cover some losses in assets on wholesale levels," she says.
Numerica likely will adjust its first-quarter loss due to legislation signed last month by President Obama that allows credit unions to spread out premium assessments over a period of up to eight years, Lehn says.
"I think forward statements will look better than the first quarter," Lehn says, adding that she can't recall another quarterly loss in her 20-year tenure with the credit union.
Meantime, she says, ongoing operations are doing well.
Loans jumped 11 percent in the first quarter of 2009 to $653.3 million, compared with $588.7 million in the year-earlier quarter.
"We've had tremendous mortgage-refinancing activity, more than double the rate of last year," Lehn says.
As of May 21, Numerica's first-mortgage originationsprimarily home-refinance loanstotaled $52 million for the year, compared with $20.4 million in the year-earlier period.
"It's a stress reducer for members to reduce their paymentsin some cases by hundreds of dollarsby getting current lower rates on their mortgages," Lehn says. "Our job is to do whatever we can to improve our members' financial lives."
The credit union is shifting some resources and moving its focus from car loans to meet demand for first-mortgage loans, she says.
Numerica also has placed greater emphasis on small-business services in the last five years, Lehn says.
"As our members go through career changes, they often open their own businesses, and we want to continue to serve them," she says.
The credit union has experienced an increase in loan losses starting late last year, and Lehn says she believes Numerica will have higher loan losses than normal in 2009.
"Around last October, we started seeing an increase in delinquencies on vehicle loans, but they remained at manageable levels," Lehn says. "We didn't see the real estate problems the rest of the country experienced. We're still not seeing a lot of problems with real estate loans."
In the first quarter, Numerica increased the amount it set aside to cover potential loan losses to $1.8 million, up from $790,000 in the year-earlier period.
The credit union has experienced steady growth in customers, and has a current membership of about 78,000, Lehn says.
"Membership has grown about 5 percent a year, and Numerica's assets have grown at a higher rate," she says.
Assets grew to $912.9 million as of March 31, up 19 percent from a year earlier. The credit union's deposits totaled $745.4 million as of March 31, up 19.5 percent from $624 million a year earlier.
"I'm guessing members are moving their money from other institutions that have gotten more negative publicity than credit unions," Lehn says. "Safety is a big priority for our depositors."
Numerica has 17 branches in the Inland Northwest. It opened six new branches in the last three years, including two last year in Airway Heights and Moses Lake, Wash. Currently, the credit union has no firm plans to open more branches, Lehn says.
Numerica was founded during the Depression as Spokane Railway Credit Union and originally limited its membership to railroad employees and their families.
It later expanded eligibility to include all Spokane-area transportation-system employees.
Now, anyone who lives, works or worships in Washington state or North Idaho can become a member.
It changed its name to Numerica Credit Union in 2001, and a couple of mergers this decade enabled the credit union to expand into North Idaho and Central Washington, Lehn says.
Numerica now has nearly 300 employees, 130 of whom work in its Spokane Valley headquarters building at 14610 E. Sprague, the former Safeco Corp. building, where the credit union has been based for about a year. The credit union occupies 100,000 square feet of floor space in the two-story building and is looking to lease out about 20,000 square feet of space, Lehn says.
Numerica has enjoyed a low turnover rate among its employees, she says. Starting at the top, President and CEO Dennis Cutter has been with the credit union for nearly 40 years.
The credit union has a three-year internal process called Management in Motion that's designed to prepare strong performers for promotion, she says.
"It's our priority to keep good employees and move them along," she says.
Numerica has grown to be a relatively large credit union in the state and nationally, Lehn says.
"We're the fourth largest credit union in the state," she claims. "There are 8,000 credit unions in the country, and we're in the top couple hundred."
Lehn says the credit union had assets of $60 million when she started her career there 20 years ago.
"Now it has over $900 million in assets," she says, adding, "The $1 billion benchmark is always a goal. It might happen next year."
Subscribe today to our free E-Newsletters!SUBSCRIBE