Central 1 Credit Union posted solid results for its first post-merger year, the company said Thursday.

In the first-ever combination of provincial central credit unions, Credit Union Central of British Columbia and Credit Union Central of Ontario Limited merged on July 1 last year. The combined entity, Central 1 Credit Union, serves as the central banking facility and trade association for nearly 200 credit unions in B.C. and Ontario.

Central 1 said net income was $29.8 million in 2008, up 22% from the record $24.4 million posted by B.C. Central alone in 2007.

“I’m very pleased that Central 1 can report such strong results in its first year of operation serving the credit union systems of two provinces,” said Don Rolfe, president and chief executive officer. “This demonstrates the benefits of consolidating the systems’ second-tier organizations.”

In a challenging year in the world financial markets, Central 1 performed well in its role as liquidity manager for member credit unions, with loans to credit unions averaging nearly $2 billion.

Central 1 serves as the primary source of borrowed liquidity for credit unions, and facilitates access to other liquidity sources such as Canada Mortgage and Housing Corp.’s mortgage-backed securities programs. Under Central 1’s auspices, member credit unions sold $1.8 billion in assets through those programs in 2008.

Financial margin grew to $47.1 million from $31.1 million in 2007, reflecting higher net interest spreads and the impact of the merger.

Total assets exceeded $8.5 billion at year-end, up from $5.7 billion for B.C. Central and $2.4 billion for Ontario Central at the end of 2007.

Based on these results, Central 1 paid a dividend at an annualized rate of 5.76% for the first half of 2008 and at an annualized rate of 4.13% for the second half, in line with its policy of paying a dividend equivalent to twice the average 90-day Treasury Bill rate.

After taxes and dividends, $24.1 million was transferred to retained earnings, which stood at $191.3 million at year-end. The ratio of capital to risk-weighted assets was 19.5%.

“Altogether, Central 1 is off to a strong start,” said Rolfe. “I’m looking forward to what we can achieve as a totally integrated organization in 2009, as our full potential comes into play.”

IE