Fresh off a year in which it returned $2.5 million in dividends to its members, Rogue Credit Union posted solid first-quarter growth in key metrics, despite low interest rates that have hampered some financial institutions.
The Medford-based financial institution reported a 3.7 percent year-over-year rise in net income to $5.2 million from $5 million for the first three months of the year.
"Low interest rates impact our bottom line, because we're earning less on investments and loans, but our cost of funds is also less," Rogue Credit Union CEO and President Gene Pelham said. "We're fortunate the majority of our assets are in loans to consumers."
Roughly 85 percent, or $860.4 million, of RCU's $1.137 billion in assets is presently tied up in loans and $154 million is invested in government-backed bonds and securities.
"We shoot for 80 to 90 percent of our assets to be in loans," Pelham said. "Loans earn more than other investments and they are a productive community benefit. The ongoing challenge is to stay ahead of things so as rates rise, we can adjust all those things in an appropriate manner."
Annualized loan growth rose 5.49 percent in the quarter, compared with 0.12 percent a year ago, while membership in its six-county footprint increased 17.4 percent to 101,158.
Pelham said his organization's growth rate is among the top five credit unions in the country with more than $1 billion in assets. It led Oregon credit unions with 12.78 percent growth in 2015, outpacing the 5.12 percent state average.
"Even though other financial institutions say their customers want to do their business via technology, we're finding it's exactly the opposite of what our members are telling us," he said. "They want to see the people they're dealing with."
According to the final 2015 figures, the only billion-dollar credit union with a better return on assets than Rogue's 2.09 percent was Grand Rapids-based Lake Michigan Credit Union. In the first quarter, Rogue's rate of return dipped to 1.89 percent.
The institution now has 369 employees in its system, including 285 in Jackson County.
Pelham recently began a three-year term on the Federal Reserve's 12th District Community Depository Institutions Advisory Council. While parts of Europe have entered into negative interest rate territory, Pelham doesn't anticipate that happening in the U.S.
"The underlying economy is strong enough to the point where, at least the local Fed, doesn't think we'll see a recession," he said.