RALEIGH, N.C.–State Employees Credit Union is reporting a 35% gain in net income and the addition of nearly 175,000 members during its fiscal year ending on June 30, according to an email to members.
The $56-billion SECU, the second largest credit union in the world, said it had net income of $283 million in its just concluded fiscal year, versus $209 million a year earlier. That figure is below the prior three years, in which SECU averaged $530 million annually, according to Business North Carolina.
‘Steady Loan Growth’
In the annual report sent to members, Brady said the higher earnings stemmed from “steady loan growth across the portfolio” as well as its efforts to hold expenses below budgeted levels, Brady said.
Excluding repayment of a $5 billion loan through a Federal Reserve program to boost liquidity, the credit union reported asset growth of 9% as it added members at more than double the usual pace of about 75,000 members annually, the Business North Carolina analysis added.
According to Brady’s email, SECU now has 2.94 million members and 7,700 full-time employees, compared with two–million members and 5,526 employees in June 2015. SECU remains well-capitalized.
Primarily Residential Lending
As Business North Carolina noted, SECU operates largely as a residential lender, with about 78% of its $36 billion loan portfolio made up of mortgage loans on properties for one to four households. It does not make business loans.
It reported charge-offs of $135 million in the first half of the year, mostly related to unsecured credit cards, vehicle loans and leases. Residential loans made up only $2.6 million of the charge-offs.
In her annual report to members, Brady said key initiatives included a new mortgage servicing system that will bring back a construction loan program, and the launch of credit cards that offer rewards for travel and other benefits. A new digital platform, including an improved mobile app, is expected to launch early next year, the email added.
One thing SECU said it will not be doing is merging or acquiring other credit unions or institutions.
