Higher expenses trim Servus Q3 earnings
Servus Credit Union’s earnings for the third quarter of 2012 were down 20 per cent from the same period last year. But nine months into its current fiscal year, the member-owned financial institution had still exceeded its performance for all of 2011.
Servus reported on Friday that its income, before patronage allocations and income taxes, for the three months ended July 31 was $21.7 million. That compares with $27.1 million for the same quarter in 2011.
The lower earnings reflected higher operating expenses — particularly in the area of personnel — with operating expenses totalling $78.4 million, up 17 per cent from $67.2 million for the same quarter in 2011.
Servus president and CEO Garth Warner attributed the higher expenses to costs associated with staff, branches and technology.
Servus opened its new branch in Clearview Market Square during the quarter, and completed work on a branch in each of Calgary and Edmonton.
Warner pointed to the credit union’s loan performance as a positive for the quarter.
“Exceptional loan growth in Q3 offset income challenges posed by continued low rates,” he said in a news release.
During the first nine months of its 2012 fiscal year, which started Nov. 1, Servus’s income before patronage allocations and income taxes was $79.7 million, up nearly seven per cent from $74.7 million for the same period in 2011. The figure is also more than the $76.6 million earned for all of last year.
Operating expenses during the first three quarters of 2012 totalled $214.4 million, a 6.5 per cent increase from the $201.4 million incurred to July 31, 2011.
Member loans reached $10.4 billion during the third quarter, up seven per cent from $9.7 billion a year earlier. Deposits were up to $10.7 billion, a five per cent improvement over $10.2 billion, and Servus’s assets hit $11.8 billion, more than five per cent higher than the $11.2 billion of a year ago.
Members’ equity in the credit union was $950.9 million, up 7.5 per cent from $884 million after three quarters last year.
Headquartered in Edmonton, Servus operates at more than 100 locations in 62 Alberta communities. It has nearly 390,000 members.