VACAVILLE -- After aggressively seeking resolution for borrowers whose loans became distressed during the economic downturn, Travis Credit Union reported to regulators that the value of its delinquent loans fell 62.3 percent to $9.3 million in 2012.

Reflecting economic improvement for Solano County, the period also marked what Chief Financial Officer Nav Khanna said was the credit union's heightened focus on the basics of community lending. Expanded services to both businesses and individuals are expected to guide to the $2 billion institution's activities in 2013.

[caption id="attachment_68662" align="alignright" width="160"] Nav Khanna[/caption]

"We have been very proactive in reaching out to our distressed members and working with them," said Mr. Khanna, noting efforts in refinancing and quick resolution of chargeoffs. "A lot of the actions over the past six years have started to come to fruition."

Including a lower allowance for loan losses, net loans at the end of 2012 grew 2.7 percent to $971.9 million, compared with a year before. Much of that increase was attributable to growth in new- and used-vehicle loans, a specialty for Travis Credit Union since the early 2000s.

The number of members last year rose 0.68 percent to 178,285.

Net income of $30.8 million increased 42.6 percent, helped by a 96 percent reduction in the provision for loan losses and one-time investment-related and acquisition-related income. The credit union had $228.5 million in equity at the end of the year and an-equity-to-total-asset ratio of 11.3 percent.

Despite gains in net income, total interest income for the year fell 10.5 percent to $72 million. The total number of business loans grew by 13.7 percent to 232,  yet amid a series of business chargeoffs, the business loan portfolio shrank by 26 percent to $97.6 million.

The credit union's investment portfolio, currently valued at $808.1 million, remained largely the same size as in 2011.  The equity allocated to that portfolio would gradually transition to loans as demand increased, according to Mr. Khanna.

Part of that increased demand could come from the business community this year, following Travis' work building its commercial lending team last year, he said. That work includes the appointment of a new commercial lending vice president, along with several new commercial lending officers.

"We took time in 2012 to make that department into what we want it to be," Mr. Khanna said. "We're excited about what will happen in 2013."

Expectations for 2013 include a $15 million increase in loans and $18 million in additional business lending through participation in such loans with other credit unions, Mr. Khanna said.

Staff at branches are also undergoing additional training on mortgage underwriting, and new information systems have been installed to allow follow up on mortgage financing from the branch level.

"Other financial institutions can try to duplicate our financial products or pricing, but they can't duplicate our people," he said.