Redwood Credit Union earned $1 million in first quarter, a significant improvement compared to a year ago, when it lost millions of dollars during the global financial collapse.
It also began growing in size again this year, with assets increasing 1.8 percent to $1.7 billion, according to a quarterly report released Monday.
"We had a strong first quarter," said Brett Martinez, president and chief executive of Redwood Credit Union. "We're doing a lot better compared to this time last year."
The growth in assets was largely driven by a 4 percent increase in its membership, he said.
"There is really a movement to financial cooperatives, which is really what a credit union is," Martinez said.
Nonprofit credit unions such as Redwood are focused on the financial health of members, not on corporate shareholders, Martinez said. Redwood Credit Union has spent the last year helping its members cope with The Great Recession, rising unemployment and smaller paychecks.
"Our focus has been working with our 147,000 members to keep them in their homes and in their cars, and working with them on their budgets," Martinez said.
During the past 12 months, Redwood has modified more than $60 million in members' real estate loans, according to the financial statement.
"That number by itself shows that we have been helping people," Martinez said. "It's our No. 1 focus."
Redwood Credit Union, the second-largest financial institution in Sonoma County by asset size, remained well capitalized, according to government standards.
The Santa Rosa-based credit union shrunk in asset size every quarter last year as it wrote off $29.5 million in delinquent loans. Overall, it reported losing $11.5 million during 2009, the credit union's first annual loss since the global recession hit.
A year ago, the credit union posted a $10.6 million loss in the first quarter. Much of it was due to a one-time loss at a corporate credit union that served Redwood and other retail credit unions.
Western Corporate Federal Credit, which was based in the Los Angeles area, had invested 80 percent of its portfolio into mortgage-backed securities, which rapidly lost value during the financial collapse. Members such as Redwood saw their investments in WestCorp totally wiped out when the corporate credit union was seized by the federal government in March 2009.
This year Redwood is off to a much stronger start, Martinez said. "We're seeing positive signs of recovery," he said. "Those one-time expenses won't happen again."
Loan losses during the first three months of this year continued at a pace similar to last year. Redwood Credit Union charged off $7.4 million in nonperforming loans in the first quarter, compared to an average quarterly write-off of $7.35 million last year. The percentage of its loans that were delinquent remained historically high, but decreased slightly compared to a year ago.
"We're safe and sound and we're well capitalized," Martinez said. "We're in a really good position to stay focused on our members and community."
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