First West Credit Union Reports Strong 2011 Financial Results, Significant …

LANGLEY, BRITISH COLUMBIA–(Marketwire – March 28, 2012) – First West Credit Union –

  • Membership grew by more than 8%
  • Total assets increased $378 million, or 7.4% to $5.46 billion
  • Loans to members increased $289 million, or 6.5% to $4.74 billion
  • Deposits from members increased $164 million, or 3.7% to $4.60 billion
  • Net interest income was $126 million; First West’s margin is one of the best in the British Columbia credit union system
  • Net operating income was $40 million
  • Over $1.6 million was invested in building healthier communities

B.C.’s third-largest credit union today announced its financial results for the full fiscal year ending December 31, 2011. These results include the highest membership growth amongst all major credit unions in British Columbia on a percentage basis, demonstrating the strength and effectiveness of its unique multi-brand model.

“Over the past year, the First West team achieved some great successes. Notably, we increased our membership by more than eight per cent in 2011, which is a significant accomplishment – one that was only made possible through the concerted efforts of all our employees,” says First West CEO, Launi Skinner, who was recently named one of Canada’s Top 100™ Most Powerful Women by the Women’s Executive Network for a second consecutive year, and one of Business in Vancouver’s Influential Women in Business.

Skinner adds, “Our employees are known for providing exceptional service and financial solutions that are making a real difference in the financial lives of our members. Our membership growth, coupled with our strong financial results, is yet another example of how the First West model is working to serve the B.C. credit union system – enabling local credit unions to work big, by tapping into the strength and resources of a financially strong parent company, while still working local to serve the unique needs of their members and communities.”

First West formed in January 2010 when Penticton-based Valley First Credit Union merged with Langley-based Envision Financial. Unlike most newly-merged credit unions, First West chose to continue operating its two distinct Envision Financial and Valley First brands in their autonomous regions, which in total comprises a 37-branch network.

First West Credit Union 2011 operating highlights include:

Assets: Total assets increased $378 million or 7.4% to $5.46 billion.

Income: Net interest income was $126 million. Net interest income as a percentage of average assets was 2.39%.

Similar to other financial institutions, the low interest rate environment led to margin compression in 2011; however, First West’s margin is one of the best in the British Columbia credit union system.

Retail and Commercial Banking: Loans to members increased $289 million, or 6.5%. The increase occurred primarily in residential mortgages, which rose $203 million, or 9%, and commercial mortgages, which increased $53 million or 4.8%. Deposits from members increased $164 million, or 3.7% to $4.6 billion. This was primarily due to our focus on attracting term deposits, which increased 1.1% and short-term demand deposits, which increased 7.7%.

First West’s regional commercial banking teams drew on the strength of their local relationships and local knowledge of business conditions to gain a competitive advantage in 2011. Highlights include:

  • Valley First established banking relationships with eight municipalities and enhanced its existing relationship with the City of Penticton; and
  • Envision secured a new banking relationship with the District of Maple Ridge and renewed an existing one with the City of Abbotsford for another five years.

First West Capital: The First West Capital division, which provides subordinated and mezzanine financing solutions for small and mid-market companies in western Canada, exceeded targets in its first full year of operations, funding nine deals and approving three additional ones that closed earlier in 2012. This includes funding SydneyPLUS’s acquisition of Boston-based Inmagic and enabling Bardel Entertainment to expand into Kelowna.

Lines of Business: Optimizing our lines of business is a key initiative to help First West achieve its three-year strategic plan goals including member growth and profitability growth. 2011 highlights include:

  • Expanded our partnership with Qtrade Securities-named Canada’s #1 online broker for the sixth consecutive year in The Globe and Mail’s 13th annual ranking of online brokers-to grow our wealth management business. Through this partnership, beginning in 2012, our retail banking team is providing more advice, more often to a greater number of members.
  • Increased wealth management revenue by 4.6%.
  • Increased property, automobile and casualty insurance revenue by 5.6%.
  • Increased automotive financing revenue by 19.6%. Notably, First West is the only credit union in British Columbia that offers two financing products to automotive dealers, leasing and loans.
  • Increased leasing revenue by 15.2%.

Operations: Operating efficiency was 80.5% compared to 79.2% in 2010. However, with the increase in assets and reduction in expenses, First West’s expense ratio improved to 3.06% from 3.33%.

Dividends: First West paid dividends of $1.3 million to members, bringing total dividends paid over the last 10 years to $14.9 million.

“First West is outperforming the largest credit unions in British Columbia on the growth of our non-interest income due to the diversification of our revenue sources in our insurance, wealth management and automotive leasing lines of business,” says Tom Webster, First West CFO. “We are also realizing success through our newest division, First West Capital. Our continued focus on non-interest income diversification and growth will help our credit union offset margin compression and equally important as a way in which we are keeping it simple for our members by providing key financial services to our members.”

Expanding and investing in our branch network: First West is expanding its presence in the communities it serves. In 2012, construction is beginning on a new Valley First branch in Rutland, which will feature retail and commercial banking, as well as our insurance and wealth management services, enabling us to create employment opportunities and expand our corporate citizenship activities, thereby contributing back to the community.

In the Envision region, two branches are being moved to new locations. The Scottsdale branch will move to Sunshine Hills in Delta in 2012, and construction of the West Abbotsford branch will commence in 2012, in which the Minter Street branch will move to in 2013.

Webster adds, “First West Credit Union is expanding the presence of our local brands because we know that staying local is crucial to what it means to be a successful credit union. Our multi-brand model is giving Envision Financial and Valley First the economic advantages of collaboration, including a stronger branch network, better diversification of risk and improved efficiency while still empowering them to act local and maintain their individual brands within their own communities. Our solid financial results, significant membership growth and regional investments in our branch network and communities reinforce the strength of the First West model.”

Helping our communities: First West contributed more than $1.6 million of its operating profits to local communities through scholarships, sponsorships and donations in 2011; this also includes the credit union’s contributions to the First West Foundation. Key community giving highlights include:

  • Serving as title sponsor of Run for Water, where 150 Envision employees, their families and friends participated in this new Boston qualifier marathon, half-marathon, 10K and 5K runs; more than $203,000 was raised to build water well systems in Ethiopia.
  • Raising more than $100,000 and 3,000 kilograms of food for Valley First’s Feed the Valley program in 2011, bringing our total to more than $270,000 and 7,000 kilograms of food donated since the program’s inception in March 2010. Feed the Valley was recognized with the prestigious Central 1 InNOVAtion Award in 2011. This award showcases the spirit of ingenuity that exists within the credit union system by recognizing projects that have helped improve operations by member credit unions in B.C. and Ontario.
  • Collecting and distributing over 600 gifts to 11 charitable organizations across Metro Vancouver as part of Envision’s annual Angel Tree program, which provides children and seniors in need with gifts over the holiday season.
  • Bringing the inaugural Valley First Granfondo Axel Merckx Okanagan to Penticton. A non-competitive cycling event, the Granfondo attracted more than 2,000 riders and an estimated $2 million to the region. Valley First remains as the title sponsor for the event in 2012.

Note: First West Credit Union transitioned to International Finance Reporting Standards (IFRS) effective January 1, 2010. The 2011 financial results reflect this change and comparative numbers for 2010 have also been adjusted to meet IFRS.

Annual General Meeting

First West’s AGM will be held in the two regions that Envision Financial and Valley First serve:

About First West Credit Union

First West Credit Union offers members the financial strength, comprehensive product selection and extended branch network of a large financial institution while maintaining local brand identities and a unique grassroots approach to service. Led by Launi Skinner, First West is British Columbia’s third-largest credit union with $6.2 billion in assets under administration, 167,000 members and 1,300 employees. It operates 37 branches throughout the province under the Envision Financial and Valley First brands. For more information on First West Credit Union, visit www.firstwestcu.ca.

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Wednesday, March 28th, 2012 EN

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