For the quarter ended March 31, 2009, the Credit Union posted net income of $3.4 million. These results reflect increasing member demand for mortgage loans, our ongoing process improvement and cost containment efforts, and prudent management of the Credit Union's financial position.
While we are encouraged by our first quarter earnings, we know the remainder of 2009 will continue to be very challenging for the financial services industry. The State of Arizona continues to deal with declining property values and rising unemployment. While we can't predict the future, we can tell you that we are taking every step to assure that your credit union remains safe, solid and secure.
When we communicated our year-end 2008 financial results in January, we did not anticipate the actions by our federal regulators concerning stabilization of the corporate credit union system. Since that time all credit unions were notified by the National Credit Union Administration (NCUA) that they would be assessed a fee to replenish the credit union industry's share deposit insurance fund. In addition, we would be required to reduce the value of capital investments we hold in corporate credit unions.
Our operating results for 2008 reflect an $18.6 million loss for the year. This was caused by two factors: a $13.7 million reduction in earnings caused by the actions of the NCUA and additional loan loss reserves, which are set aside as a precautionary measure to cover some borrowers' inability to repay loans.
It is important to note that our core business remains strong. During 2008 the Credit Union saw gross revenues increase by 12%, while expenses only increased by 5.8%. Deposits increased by 15% and loans grew by 14%. Assets rose by 14%, reaching $1.3 billion at year end. While many lenders dropped out of the market in 2008, we originated nearly 900 first mortgage loans for $156 million. We provided the funding to assist more than 6,500 members with the purchase of a new or used vehicle, which totaled $155 million.
We remain cautiously optimistic that recent signs of economic stabilization will continue. Our national leaders have made it clear that they will do whatever it takes to turn things around and we are committed to the same cause.
Thank you for your support of Arizona State Credit Union. Together with our associates, management team and dedicated volunteers, the Credit Union is pleased to serve the needs of more than 130,000 Arizonans by providing a safe, solid and secure choice for all your financial needs.
David E. Doss
President / CEO