The credit union has traded its red pen for black.
Northern Savings reported a net income of over $1.5 million this year after clawing its way out of a $2.5-million deficit in 2015.
Members can take a collective sigh of relief as the credit union’s plans for restructuring, thinning its assets and staff, and bringing the focus back to the north — the core product — seems to be working.
“I think in the past the credit union was a bit distracted in terms of activities in the south, so it was too much removed. This is our home,” said Fay Booker, the interim CEO.
Last year, there was no distribution to members, but after the changes the board of directors were able to declare $85,000 for members total in 2016.
Chairperson Flora D’Angelo attributes much of the year’s highlights to the interim CEO.
“In March 2015 she was instrumental in working with board and management to ensure the financial stability of the credit union,” she said. “If there’s stability now it’s because of Fay.”
Although total assets dropped 20.5 per cent (from about $896 million in 2015 to $712 million in 2016), operating expenses also went down 24 per cent (from $27 million to $20.6 million).
Part of the reason for the drop in operating expenses was because 2015 was a big year for severance payments delivered to employees who were let go in the corporate office, and as a result of downsizing mortgage investment operations in Victoria and closing agent deposit operations in Surrey.
Severance payments totalled more than $1.5 million in 2015, when the credit union laid off 12 employees from its corporate office. In 2016 when the short-lived CEO Geoff Grodecki left the credit union, and when more staff were laid off due to the credit union downsizing its assets in southern B.C., severance was down to less than $120,000.
“2015 was a difficult year but also a catalyst year to show us that we need to focus on our home communities,” said Booker.
After weathering the storm, the credit union is blossoming once again with a focus on Prince Rupert, Masset, Queen Charlotte and Terrace. Northern Savings has retained some of its mortgages in the south but it’s pulled away from that market.
“We’re renewing those mortgages that are maturing but we’re not writing any new mortgages in the south. It’s just not our core area of business,” she said.
Despite the positive outcome on refocusing its business in the north, there are still concerns over the stability of the credit union after it has gone through several CEOs.
Retaining a CEO for the credit union has been a challenge in recent years. In March 2015, the credit union announced Ken Doleman’s departure without offering a reason. Doleman had spent two-and-a-half years in the corporate office. To fill the void were two interim CEOs — Sharon Stromdahl and Barry Delaney — who each held the position for a number of months.
Booker confirmed she will remain as interim CEO until the end of this year — and the board chair said they would have her as long as she is willing to stay — but whether she stays permanently is still to be determined.