DFCU Financial Posts Solid 1st Quarter Earnings

DFCU Financial has been in the media spotlight because of its bid to convert to a mutual savings bank. Find out how the credit union performed in the first three months of 2006.

Amid the frenzy that encircled DFCU Financial during its bid to convert to a mutual savings bank, the credit union performed strongly in the first quarter of 2006. The credit union’s return on assets (ROA) was 1.7 percent at March 2006, slightly down from March 2005 when it was 1.9 percent. However, this year DFCU had a 15.3 percent increase in loan income which drove ROA, while last year a one-time non-operating gain was the source of strong ROA.

On the expense side, total expenses increased 6.3 percent between March 2005 and March 2006. The fastest growing categories were travel and conference expenses (80.3 percent) and professional services (46.0 percent).

The gap between DFCU Financial’s net interest margin and operating expense ratio is 68 basis points, its largest gap in 5 years. This traditional measure of profitability highlights that the credit union, unlike many credit unions,is still managing its core lending and savings business at a level above the cost of its daily operations.

Other highlights for the credit union include:

  • Real estate loans grew 13.0 percent to $800.4 million
  • Total shares increased 7.6 percent to $1.4 billion with regular shares and deposits and share certificates growing the fastest. The growth in these categories primarily came from members shifting their share draft balances into these accounts
  • DFCU Financial’s capital to assets ratio was 12.3 percent, well above the NCUA’s definition of well-capitalized (7.0 percent)
Key Performance Indicators for DFCU Financial
Data as of March 31, 2006
Assets $1.8 Billion ROA 1.72%
Loans $1.0 Billion Net Worth/Assets 13.08%
Shares $1.4 Billion Delinquency 0.20%
Members 160,987 Branches 11

To learn more about top-performing credit unions in the 1 st Quarter of 2006, check out our Peer-to-Peer software. Click here to view a 2-minute demo of its capabilities.

April 22, 2016

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