Reductions were also made in the base salary and benefits area for Business Partners' 45 employees, said Vikki Kaiser, president/CEO of the $523 million Great Lakes Credit Union in North Chicago, Ill., one of the CUSO's three principal owners. Plans are in place to reduce leasing costs by moving to another building through negotiations for a shorter term lease with the NCUA, which owns the building. Business Partners is expecting to move by June.

Additional moves included the formation of a credit review committee, consisting of the chief lending officers from Business Partners' primary owner-credit unions, the CUSO said. Their main responsibility is to ensure that each loan originated through Business Partners meets particular lending criteria.

During the previous loan review process, credit unions hired a third party to review the loans and make the recommendations, Kaiser said. Internally, credit unions were required to approve and underwrite the loans. Now, before a loan gets to the loan participation level, the originator presents it to the credit review committee to ensure that it's strong enough to take to the participating credit unions. The committee has been in place for about six months.

In November 2012, Business Partners announced three new principal owners of the CUSO. In addition to Public Service CU and Great Lakes CU, the $610 million Farmers Insurance Group Federal Credit Union in Los Angeles is now the lead shareholders. The CUSO has 15 credit union shareholders.

"Every loan is reviewed to ensure risk tolerance levels comply with BP's guidelines, which provides our participants with an extra layer of support in their underwriting process," Maus said.

The NCUA had previously reached an agreement to sell its controlling interest to a managing partner group consisting of the three principal credit unions. The price was not disclosed. The CUSO said it serves more than 150 financial institutions in 40 states.

Founded in 1995 by the defunct Telesis, for much of 2012, Business Partners had been operating under the management of the NCUA after the regulator was appointed the conservator of Telesis last March shortly after the California Department of Financial Institutions shuttled the troubled credit union into conservatorship.

Maus said he is expecting the second quarter for Business Partners to be the most profitable quarter in three years. For one, the CUSO has approximately $7 million in capital, he pointed out. The company earned $161,000 during the first three months this year and has $67 million in the business loan pipeline, Kaiser said.

"There are other CUSOs that have 20% capital that tout themselves as being very strong and serving a whole array of credit unions, but if you actually look at the numbers, we're still the leaders in terms of volume, strength and capital," Maus said.

Since Telesis was taken over by the NCUA, Business Partners has been in recovery mode. Along the way, some credit unions have chosen not to use the CUSO's services, Maus said. Still, new clients have come aboard and those that have used the CUSO heavily in the past, continue to do so, he added. Great Lakes CU has been one of Business Partner's longtime owners, with a 2% stake in the CUSO.

"During those years, we were very profitable. We received yearly income from our investment and it more than paid for our investment, which was $1 million," said Kaiser.

As for the strategy to repair Business Partners' image after Telesis, Maus said a profitable first quarter is one sign that the tide is turning.

"Time heals all wounds. The fact is we're doing more originations and we have a list of users that want to absorb or want a piece of a loan participation," Maus said.