AEA Federal Credit Union reported improved financial performance for the year ending Dec. 31, 2012, in its fourth quarter call report posted this week on the National Credit Union Administration's website.
The progress was attributed to several new services for members and more efficient operations.
However, AEA continues to operate under the conservatorship of the NCUA, as it has since December 2010. And a $20 million cash infusion the credit union received from NCUA a year ago remains on its books.
Still, the latest call report illustrates the improvements AEA has made in its financial picture after suffering millions of dollars in losses as the result of a business loan kickback scheme that led to the conviction of a former lending officer.
The progress has NCUA officials hopeful the credit union can emerge from conservatorship this year.
AEA posted a 2012 year-end net income of $3.15 million. Total assets at the end of the fourth quarter stood at $231 million, and the net worth ratio improved by 137 basis points from year-end 2011, ending the fourth quarter at 4.02 percent. That's up from 3.3 percent the previous quarter.
“We reduced expenses, streamlined operations, retooled infrastructure, introduced an array of new services and continued the process of returning AEA to the core credit union business model,” Elizabeth Whitehead, NCUA Region V director and agent for the conservator, said in a news release. “We see significant progress in all of these areas, and we are very pleased with the credit union's positive performance in 2012.”
AEA's management team and staff worked diligently to introduce new services to the credit union's 42,000 members this past year, stated the NCUA news release. The credit union unveiled a new home banking website and mobile platform, launched a dynamic suite of checking accounts, created a direct auto lending platform and announced a fixed-rate Visa credit card program.
In addition, AEA joined the Shared Branching and CO-OP ATM Networks in 2012, creating 36,800 additional service sites for members.
“Our goal for 2013 is to release AEA Federal Credit Union from conservatorship, when appropriate, and return management of the credit union to a highly capable local board of directors,” Whitehead said.
In a letter to AEA members, interim CEO Tom Martin wrote: “While celebrating our rich history of serving Yuma and La Paz counties, we look ahead with anticipation to all that the new AEA Federal Credit Union offers members in 2013. Emerging from conservatorship and returning AEA back to the membership continues to be a primary focus.”
He continued: “Steady progress has been made in the selection of qualified volunteers to serve as board and supervisory committee members, supporting AEA's long-term growth plan. ... My thanks to all members who have stepped forward and expressed interest in serving on our volunteer board and committees.”
Established in 1942, AEA operates five branches in Yuma and La Paz counties. Deposits at AEA are protected up to $250,000 through NCUA's National Credit Union Share Insurance Fund.
Much of AEA's financial difficulties were the result of fraudulent activities by William Liddle while he was head of its business lending department from 2004 to 2009. Liddle was convicted of 54 felony counts in the case and is serving a 15-year sentence in federal prison. Co-defendant Frank Ruiz is serving two years for his role after reaching a plea agreement.