The credit union has traded in its red pen for black.
Northern Savings reported a net income of more than $1.5 million in this year’s annual report — after clawing its way out of a deficit of approximately $2.5 million 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 with the changes made the board of directors were able to declare $85,000 for members total in 2016.
Board chair 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 approximately $896 million in 2015 to $712 million in 2016), operating expenses went down 24 per cent (approximately $20.6 million in 2016 from $27 million in 2015). Part of the reason those operating expenses were much less in 2016 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 based in Victoria and the closure of agent deposit operations in Surrey.
Severance payments totalled more than $1.5 million in 2015, which was when the credit union laid off 12 employees from its corporate office in October. 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,” Booker said.
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.”
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.
It is true that 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 there were two interim CEOs, Sharon Stromdahl and Barry Delaney who held the position until the end of December 2015 and then Grodecki stepped into the role from May until October 2016.
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 permenently is still undetermined.