/Profits+up+27+percent+at+Alabama+credit+unions

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Profits up 27 percent at Alabama credit unions Premium content from Birmingham Business Journal - by Antrenise Cole, Staff

Date: Friday, June 24, 2011, 5:00am CDT Credit unions in Alabama recorded a 27 percent boost in profits in the first quarter of this year. Like their banking counterparts, credit unions tout setting aside less money for sour loans as the main reason for increased earnings. Net income for the state’s federally insured credit unions was $31.2 million for the quarter that ended March 30, compared to $24.5 million during the same period the year before, according to data from the National Credit Union Administration. Three quarters of improvement in credit unions’ earnings can be attributed to setting aside less money in provisions for loan losses, said Patrick La Pine, president and CEO of the League of Southern Credit Unions. Alabama credit unions also are seeing fewer delinquent loans and fewer net charge-offs, or loans that credit unions no longer collect on and are removed from their balance sheets. The total aggregated delinquent loans for credit unions in Alabama were $89.7 million, a 4.6 percent dip from the $94.1 million at the end of the first quarter of the previous year. Net charge-offs shrunk 32 percent to $12.3 million in the first quarter, compared to $18.2 million the same time the year before. “Earnings are continuing to improve, while delinquencies and net charge-offs continue to fall, which are all good trends,” La Pine said. “We are all hopeful that the worst is behind us. The rest of the year really depends on what happens in the general economy and overall consumer confidence.” La Pine said credit unions have continued to face challenges with low loan demand and low investment yields. However, he said if consumer confidence picks up, loan demand will pick up, which will further reduce delinquencies and charge-offs while improving income. Among those reporting a jump in profits in the first quarter was America's First Federal Credit Union, the second largest credit union in the Birmingham metro area. It reported a $1.9 million profit for the first quarter of this year, up 116 percent from the $863,947 the credit union


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