SANTA ROSA -- Citing marked improvements in the financial footing of its members, Redwood Credit Union reported increases in portfolio quality, lending, equity, total membership and a number of other measures during 2012.

Those year-end metrics, reported to Redwood Credit Union's chief regulator, the National Credit Union Association, follow what President and CEO Brett Martinez said was a concerted effort to boost services and advising for both individuals and businesses that ramped up during the worst of the recession.

[caption id="attachment_68579" align="alignleft" width="142"] Brett Martinez[/caption]

"We had our best year last year in our 63 years of service, after the worst recession in the history of the United States," Mr. Martinez said. "We are stronger than we've ever been, with the least amount of risk we've ever had."

The largest credit union in the North Bay and the 65th-largest in the nation, Redwood Credit Union reported $2.1 billion in assets at the end up 2012. Total assets had grown 9.3 percent over the year, and membership, now exceeding 224,000, grew 6.4 percent.

Helped by a lower loss provision and activity in non-lending services like investment planning, net income for the year rose 80.5 percent, to $33.7 million. The credit union reported total equity of $184.8 million at the end of 2012, up 20.8 percent and representing approximately 8.8 percent of total assets.

Total loans, now valued at $1.46 billion, grew 3.9 percent compared to the end of 2011. The total number of loans made during the year increased by 1.4 percent compared to 2011.

The number of business loans increased at a faster rate, rising by 9.5 percent compared to 2011 and totaling 795 the end of 2012. While the overall value of loans in the business portfolio, $180 million, had declined by 3.6 percent, Mr. Martinez said that the lender was not necessarily pursuing the kind of large loans that could boost that dollar amount and that its core target of businesses under $5 million in assets was on stronger footing in 2012.

"You don't just underwrite and walk away. We talk to our businesses all the time -- businesses are stronger," he said.

Redwood Credit Union was also among the most active lenders through the U.S. Small Business Administration's 7(a) program during the federal fiscal year ended Sept. 30, 2012. The credit union completed the highest number of loans -- 26 -- for any lender in the North Bay, which excludes SBA lending in San Francisco.

In the current low-interest-rate environment, Redwood Credit Union distributed 41.9 percent less in dividends to its members in 2012, totaling $5.6 million. The credit union created its investment division in part to provide alternatives to dividend income, and the current environment has helped drive a larger number of members to pursue options there, Mr. Martinez said.

Meanwhile, the same environment has been a boon for many borrowers, helping fuel a 17.1 percent increase in new first mortgage loans and mortgage refinance loans during the year.

Delinquent loans represented less than 1 percent of total loans at the end of 2012, declining 62.5 percent, to $13 million, compared to the end of 2011. Total charge-offs of $24.6 million were down 22 percent versus the year before, and a loss allowance of $34.5 million was down 21.6 percent. The provision for losses, $11.7 million, was down 56.4 percent.

Mr. Martinez said that the lender's efforts to assist both members and non-members with financial planning, including hiring of additional staff, helped to drive those improvements. The credit union had 387 full-time employees at the end of 2012, and an efficiency ratio of 63.5 percent.

"Last year and this year are not really about 'last year and this year.' They are about what we did during the five years before" he said. "We invested more in financial literacy. Ultimately, when you do the right thing, it comes back full circle to you."

Activities of the past few years also include upgrades to Redwood Credit Union's website, online banking, ATMs and mobile banking offerings. That technology continues to be rolled out, with remote deposit capture for the mobile application expected around April.