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Hawaii State FCU sees net income surge after lending uptick

Net income at Hawaii State Federal Credit Union was up by 108 percent in 2018 to $9.84 million, compared with $4.72 million in 2017.

The Honolulu-based credit union on Friday announced growth across a number of fields in 2018, including 6.2 percent membership growth and 3.3 percent asset growth, bringing the CU to more than 106,600 members with $1.53 billion in assets.

Lending continues to be a major driver of Hawaii State FCU’s growth. The credit union ended 2018 with $977 million in loans, up 14.3 percent from $855 million at the close of 2017. The CU reported it has had 21 consecutive quarters of loan growth.

A review of the credit union’s 2017 and 2018 call reports revealed it held 40,096 loans as of Dec. 31, 2017. The two biggest categories for 2017 by numbers of loans were all other unsecured loans/lines of credit (17,510 loans for more than $215 million), and unsecured credit card loans (12,307 for $38 million). In terms of dollar amount, the biggest category at the end of 2017 was loans/lines of credit secured by junior lien 1-4 family residential properties (3,328 for $242 million). The credit union also held 825 loans/lines of credit secured by 1st lien 1-4 family residential properties for a total of $221 million.

On Dec. 31, 2018, Hawaii State FCU held 43,707 loans, an increase of 3,611 loans year-over-year. The two biggest categories in terms of numbers of loans continued to be all other unsecured loans/lines of credit (19,986 loans for $247 million), and unsecured credit card loans (13,384 for $41 million). Loans/lines of credit secured by junior lien 1-4 family residential properties remained the category with the largest dollar amount, with 3,578 loans for $283 million. The CU added one loan/line of credit secured by 1st lien 1-4 family residential properties, bumping its total to 826 loans for $230 million.

“Hawaii State FCU’s 2018 earnings were driven by strong loan growth, up 14 percent, which outperformed the local market,” Andrew Rosen, president and CEO of Hawaii State FCU said in a statement. “We surpassed our initial projections for the year, and as a not-for-profit organization we feel it is only right to return profits to our membership by way of higher savings rates. We know it also is a way to help keep more money in Hawaii as interest rates are trending up across the nation.”

According to Rosen, one method the CU used to return earnings to members was through a new savings account product known as “Relationship MAX,” which gives a higher yield for large balances. The account offers an average percentage yield the CU says is up to 10 times higher than Hawaii’s traditional bank savings average: 1.50 percent APY.

The credit union auto-converted its members’ qualified accounts to the Relationship MAX account at the end of 2018.

Hawaii State Federal Credit Union was chartered in 1936 and serves more than 106,000 members on the islands of Oahu and Maui.

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