PITTSFIELD -- The Greylock Federal Credit Union experienced a decrease in net income in 2013, following a significant increase the previous year.

Net income, or total earnings, at the county's largest credit union dropped to $4.6 million in 2013 from $6.1 million in 2012, according to Greylock's annual report. But President and CEO Marilyn L. Sperling said the 2012 numbers were unusual for Greylock and that last year's figures were closer to the norm.

"Earnings of $4.6 million for an institution of our size is a good number," she said. "I would suggest that $6 million in 2012 was more of an anomaly as we tried to hone in on loan quality and determine what a well-funded reserve looked like.

"I think the constant earnings are going to come in at $4 million," Sperling said.

The drop in net income was due partly to a $5 million drop in Greylock's interest income in 2013, and a $3.6 million decline in total interest expense.

Sperling attributed the drop in interest income to the low rate environment on loans, "that we're experiencing right now."

As an example, she cited Greylock's $400 million adjust-
able rate portfolio.

"It's good for the members because those interest rates decline," Sperling said. "But as those rates decline so does our interest income."

Sperling said Greylock is optimistic heading into 2014, because the economic conditions have changed greatly from 2011 when the credit union's net income fell to $3.


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8 million due to a 2 percent drop in mortgage rates.

"We're not dealing with the same conditions as in 2011," Sperling said. "People are back to work. They may be working more than one job, but they're getting back on their feet.

"This quarter we're seeing more mortgage activity than this time last year," she added, "and we've had our best auto loan activity since 2012."

Greylock is still the county's top local lender for auto loans, and the county's No. 1 mortgage lender, according to the Warren Group of Boston, which tracks state real estate transactions. Sixty eight percent of Greylock's total mortgage loans closed in the first quarter of 2014, compared to 44 percent during the same time period last year.

"Borrowers are still prudent," Sperling said. "But lending activity is picking up."

Greylock has a $110 million cushion in reserve funds to guard against another economic downturn, according to the annual report. It also has $93 million in capital, and $17 million in reserves for potential loan losses within the loan portfolio.

"We really manage our expenses very, very tightly," she said.

Greylock had $1.1 billion in assets at the end of 2013, with $91 million of those assets being managed by the Greylock Investment Group, a credit union subsidiary.

Greylock's regulatory net worth-to-asset ratio -- the primary indicator of a credit union's financial strength -- improved to 8.76 percent in 2013, which is 71 base points higher than the 8.05 percent it registered in 2012. Greylock picked up 2,700 additional members last year, and also introduced new electronic banking services.

To reach Tony Dobrowolski:
TDobrowolski@berkshireeagle.com
(413) 496-6224