Expenses, loan losses drag on OnPoint third quarter results
Our quarterly peek at the financials of OnPoint Community Credit Union gives us a picture of the state of the Portland-area economy, and it confirms that it's no picnic out there.
OnPoint's net income for the first three quarters of 2010 was $7,470,534, down 65.99% from $21,965,019 in the first three quarters of 2009. Year-to-date operating expenses jumped from $39,171,979 in the first three quarters of 2009 to $54,056,612 so far this year -- a 38.00% increase. A smaller part of the decreased profit was the $16,935,292 in loans written off so far this year, compared with $14,993,022 at this time last year.
Here are the balance sheet numbers, as recently filed with the National Credit Union Administration:
|Item||9/30/09||6/30/10||9/30/10||Quarterly increase (decrease)||12-month increase (decrease)|
|Federal agency securities||$267,096,828||$492,671,538||$505,421,759||2.59%||89.23%|
|Total reportable delinquency - total delinquent loans||$25,324,131||$28,487,420||$29,353,063||3.04%||15.91%|
|Total reportable delinquency - indirect lending||$5,360,245||$3,206,668||$3,055,264||(4.72%)||(43.00%)|
|Total outstanding loan balances subject to bankruptcies||$17,031,887||$16,007,824||$25,828,172||61.35%||51.65%|
|Ratio of delinquent loans to total loans (percent)||1.16||1.39||1.46|
|Ratio of total delinquent loans to net worth (percent)||10.05||10.88||11.04|
Delinquent loans are those delinquent for two months or more.
In the third quarter of 2010, deposits decreased from $2,503,549,729 to $2,488,675,931 -- a 0.59% decrease after four consecutive quarterly increases. Deposits a year earlier were $2,373,916,394, and thus for the year, deposits were up 4.83%.
That brings us to our comparison of some of OnPoint's financial data with that of three other Oregon-based credit unions: Unitus here in Portland, First Tech in Beaverton, and Oregon Community down in Eugene.
One of the first things we've noted is that First Tech has substantially increased the amount of delinquent loans it had on its books as of June 30 of this year. In the second quarter report that First Tech filed over the summer, it showed total delinquent loans of $10,587,881 as of that date; in the current report, that figure has been increased to $16,846,609. That's a 59.1% increase in the restated figure -- apparently something seriously screwy happened there.
One number that we've been tracking for the group has been the ratio of delinquent loans (two months or more) to total loans -- the higher the number, the worse the portfolio from a delinquency standpoint. Here are the percentages for all four credit unions in that department at three recent reporting dates (with the First Tech June 30 number revised upward):
Another ratio that we've been watching is delinquent loans to net worth. Here are the percentages for the group on that score:
Finally, here are the year-to-date net income (loss) figures for the group, worth noting for the trends. All four credit unions took insurance charges in 2010, which are reflected in these three-quarter year-to-date numbers:
A final note: The proposed merger of First Tech into Addison Avenue Credit Union in Palo Alto is now before the First Tech membership for a vote. If the merger is consummated, First Tech as we know it in these reports will cease to exist.