Central 1 Credit Union posts first quarter 2017 profit of $14.6 million, up $6.1 million from 2016

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 25, 2017) - Central 1 Credit Union (Central 1) today announced an increase in profit, assets and return on equity for the quarter ended March 31, 2017.

Central 1 reported a profit of $14.6 million, up $6.1 million or 71.8 per cent from the same period in 2016. Net financial income increased $9.5 million year-over-year, due to a $1.7 million increase in interest margin resulting from increased average interest-earning assets and a $7.8 million increase in net realized and unrealized gains, driven by the narrowing of credit spreads.

"We had a strong quarter due to investments by our Wholesale Financial Services business segment," said Don Wright, President and CEO of Central 1. "Also, credit unions continue to grow and they increased their deposits with Central 1."

Deposits from Central 1's member credit unions increased by $2.3 billion or 23.7 per cent compared to the prior year. Mandatory deposits from credit unions increased $0.8 billion, reflecting the growth within the B.C. and Ontario credit union networks. Non-mandatory deposits from credit unions increased by $1.5 billion, due to increased liquidity in the B.C. and Ontario credit union networks.

In November, the CEO Payments Strategy Committee made recommendations toward the national consolidation of the payments function. Central 1 believes that developing a national payments strategy is the right direction and during the quarter it continued to work to achieve the right solution for our credit union network and discussions on this topic are continuing.

Financially, highlights for the first quarter of 2017, compared to the same period in 2016:

• Profit for the period was $14.6 million, compared to $8.5 million.
• Return on average equity was 5.4 per cent, compared to 3.5 per cent.
• Assets were $18.0 billion, compared to $14.6 billion.

As at March 31, 2017, Central 1's ratio of regulatory capital to risk-weighted assets for provincial capital adequacy purposes was 34.6 per cent. Central 1's borrowing multiple for federal capital adequacy purposes was 12.4:1. Central 1 was in compliance with all regulatory capital requirements throughout the first quarter.

For the quarter ended March 31, 2017, Central 1 was in compliance with, or had plans to rectify exposure to, all Risk Appetite Statements.

B.C. and Ontario credit union networks

Assets of the B.C. network totalled $72.9 billion at the end of the first quarter of 2017, up from $67.1 billion a year earlier. The B.C. network's net operating income was $91.4 million, compared to $72.0 million a year earlier, mainly driven by growth in securitizations and commercial mortgages. Non-interest income increased by $19.5 million.

Asset growth was led by residential and commercial mortgages, and securitized assets. Liability growth was led by non-registered demand deposits, non-registered term deposits, and borrowings against securitized assets.

The B.C. network's regulatory risk-weighted capital ratio was 14.8 per cent at the end of the first quarter, down from 15.0 per cent a year earlier.

Assets of the Ontario network totalled $45.9 billion at the end of the first quarter of 2017 compared to $40.8 billion a year earlier. The Ontario network's net operating income was $53.5 million compared to $38.2 million in the prior year. Net interest income increased $22.3 million over the same period last year driven by growth in liquid assets and loan portfolio. Asset growth was led by residential mortgages, commercial mortgages, and loans. Liability growth was led by non-registered demand deposits.

The Ontario network's regulatory capital as a percentage of risk-weighted assets was 12.9 per cent at the end of March, compared to 13.6 per cent a year earlier.

Central 1's First Quarter Report 2017 has been filed with SEDAR and is posted on www.sedar.com and on www.central1.com.

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $18.0 billion in assets. We provide wholesale financial products, trust services, payment processing solutions and direct banking services to about 300 credit unions and institutional clients from coast to coast.

In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our 42 member credit unions in B.C. and 70 Ontario member credit unions. Our members represent a consumer-oriented, full-service retail financial network that collectively serves 3.3 million members and holds more than $118.8 billion in assets. For more information, visit www.central1.com.