Finally, California CUs grew their lending portfolios by 0.31% or $222 million in 2011's fourth quarter, which is a notable improvement from 2010's lending portfolio loss of $4 billion, the league said, citing Callahan & Associates' FirstLook Data and Analysis. During the fourth quarter, the state's CUs saw growth in the areas of credit cards ($123 million), unsecured debt ($46 million), used auto loans ($98 million) and first mortgages ($324 million). HELOCs, new auto loans and other member loans, did not perform as well and resulted in losses of $350 million, $196 million and $83 million, respectively, the league said.

The league listed three key 2012 challenges for California CUs as continued loan portfolio woes, burdens stemming from mortgages they modified for individuals and small businesses, and uncertain housing prices.

"Credit unions continue to struggle with their loan portfolios at a time when low interest rates leave little margin for accumulating retained earnings," the league said. "The backlog of delinquent loans has declined, but existing loans continue to weigh heavily upon some credit unions that are working hard to strengthen net worth ratios."

One California credit union that continues to see a light at the end of the tunnel is the $1.1 billion North Island Credit Union of San Diego, which reported a year-to-date net income of $11.92 million and net worth ratio of 6.43% in September 2011. The CU ended 2011 with a net income of $17.8 million, a net worth ratio of 7.3% and several service and product upgrades, including new ATMs, an Island Rewards MasterCard product and a new home equity line of credit.

North Island President/CEO John Tippets said he attributes the growth in part to his staff's dedication. However, he predicts the local economy will negatively affect the credit union's loan portfolio in 2012.

"There are further challenges," Tippets said. "The economy remains a great obstacle and only modest improvement can be expected in 2012. Housing prices and unemployment are not likely to show much recovery, which will consequently impact North Island in the form of continued loan losses."

Last year  was the Riverside, Calif.-based, $642.9 million Altura Credit Union's top year for financial performance since 2006, according to CEO Mark Hawkins. After a net loss of $5.8 million and net worth ratio of 5.81% at the end of 2010, as well as multiple branch closures in early 2011, the credit union ended 2011 with a net income totaling $8.43 million and net worth ratio of 7.84%.

"Although we continued to deal with a difficult economy, 2011 was the year in which we finally saw the marketplace begin to firm up," Hawkins said. "Unemployment is settling down and foreclosures and delinquencies have eased substantially. We are well positioned now for 2012, and we look forward to once again adding value to member households."

Due to a slight economic improvement in California's Inland Empire, where Riverside is located, Altura CU also managed to reduce its loan loss provisions from $35.6 million at the end of 2010 to $30.8 million at the end of 2011, the CU said.

Unfortunately, not every CU in California can report success going into 2012. The $1.1 billion, Brea, Calif.-based Evangelical Christian Credit Union made news when the Faith Center church in Rockford, Ill., which borrowed millions from the CU for an expansion project that launched in 2007, declared bankruptcy in January. According to reports in the Rockford Register Star, the Faith Center currently owes the CU $4.17 million.

Evangelical Christian CU's financial performance report reflects a net loss of $19.2 million at the end of 2011, down further from its net loss of $15.8 million at the end of 2010, and a total delinquent and charged-off loan amount of $92.7 million at the end of 2011, an increase from $76.9 million the previous year. However, the CU is adequately capitalized with a year-end 2011 net worth ratio of 7.64%.

The $318 million Telesis Community Credit Union of Chatsworth, Calif., which recently struggled to recover from defaulted, out-of-state commercial real estate loans, experienced a slight improvement in net income in 2011. According to its financial performance report, the CU had a net loss of $4.6 million at the end of 2011, following a net loss of $11.2 million at the end of 2010.

But the report also points to continued struggles for the credit union. During the same one-year time period, the CU's asset size shrank from $400 million to $318 million, its delinquency ratio rose from 11.3% to 12.2% and its net worth ratio declined from 5.51% to 5.48%.

Telesis Community CU CEO Grace Mayo declined an interview with Credit Union Times for this story.