ONTARIO, Calif. (9/29/10)--California credit unions’ second-quarter financial report card reflects a troubled economy, said an industry analyst. State-chartered credit unions’ assets, at $72.5 billion for June 30, were down 3.3% from the $74.9 billion reported as of June 30, 2009. Shares declined to $62.1 billion from $63 billion, down 1.3%, according to the California Department of Financial Institutions’ (DFI) second-quarter 2010 report. Loans were down 10.2% from one year ago, going to $44.6 billion from $49.7 billion. At $6.6 billion, net worth was down a fraction of a percent. This caused the net-worth-to-asset ratio to increase to 9.09% from 8.84% one year ago. The allowance for loan losses for the quarter was up 17.9%, rising to $1.4 billion from $1.2 billion, while delinquent loans increased 9.9%, to $1.2 billion from $1.1 billion, DFI said. California has been geographically impacted by the struggling economy, Daniel Penrod, senior industry analyst for the California and Nevada Credit Union Leagues, told News Now. “Pockets are doing OK, and pockets have been hit hard,” Penrod said. “The Central Valley and Inland Empire [primarily San Bernardino and Riverside counties, east of Los Angeles] have significant declines in housing and employment.” “Credit unions go as their membership goes,” he added. “We’re so tied into our members--that if certain employment groups or populations get hit hard, credit unions get hit hard. There are some problem areas--financial services, construction and government spending--and credit unions linked to these groups are feeling the pinch along with their members. Unfortunately, credit unions are getting caught up in the wash.” Credit unions’ net margin to average assets increased to 4.41% from 4.22% one year ago, while the provision for loan losses dropped 44.6% to $429.8 million from $775.4 million over the same period, DFI said. Net income went from a net loss of $348.5 million for the first half of 2009 to a net profit of $128 million for the same period in 2010, up $476.4 million. The number of credit unions also dropped about 7% to 167 from 181. “Initially into the recession, credit unions were able to withstand the financial storm, but the duration and depth of this has hit every industry,” Penrod said. “No one is immune. “However, credit unions made smart loans, so their portfolios have remained stronger than those of any other financial institutions,” he concluded.