LOS ANGELES — In a new sign of economic recovery, credit unions are moving tens of millions out of their loan loss reserves, enabling them to reduce red ink, and in some cases, move into the black.

"Loan losses, which had been extremely high in 2008 and 2009, have reduced significantly in the second half of 2010, and that trend looks likely to continue into 2011," said John Tippets, president of San Diego's North Island CU, which moved from a $52.4 million loss for 2009 to a $11.5 million net for 2010, due mainly to the shift of loan loss reserves. The net helped the troubled credit union giant build its net worth ratio back to 5.3%, after falling to just 3.4% at year-end 2009.

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