Two years later, The Financial Oversight and Management Board for Puerto Rico reported little to no progress in reforming the Public Corporation for the Supervision & Insurance of Cooperatives in Puerto Rico (COSSEC).
COSSEC is responsible for overseeing and insuring the island's credit unions or cooperatives.
On August 4, 2017, The Financial Oversight and Management Board had certified the Fiscal Plan for COSSEC. On August 19, 2018, COSSEC issued its revised Fiscal Plan for COSSEC, which was never certified by The Financial Oversight and Management Board.
The Financial Oversight and Management Board wrote in its Fiscal Year 2019 Annual Report that "there is a need for COSSEC to have stronger and independent governance in order to to exercise its role as a regulator and insurer."
Reforms would also include adopting regulatory and accounting reporting standards and capital levels more consistent with to that of Federal regulators.
Without meaningful reforms, federally-insured credit unions could face potential reputation risk from bad headlines about COSSEC.
Go here to read the Annual Report.
Friday, September 6, 2019
Wednesday, September 4, 2019
CU Profitability Improved in the 2nd Quarter of 2019
The credit union industry reported net income of $7.19 billion through the first two quarter of 2019, according to the National Credit Union Administration.
A vast majority of credit unions posted a profit through mid-year 2019 with only 610 federally-insured credit unions reporting a loss through the first two quarter.
Return on average assets for federally-insured credit unions was 0.97 as of June 2019. This was up 2 basis points from the prior quarter. The median return on average assets was 0.63 percent -- this is up 7 basis points from the first quarter of 2019.
Net interest margins improved by 7 basis points during the second quarter to 3.18 percent. Non-operating income as a percent of average assets edged lower by 1 basis points between the first quarter and the second quarter to 0.06 percent. However, operating expenses as a percent of average assets rose by 4 basis points during the quarter to 3.16 percent.
At the end of June 2019, industry net worth was $171.41 billion, up from $167.78 billion at the end of March 2019. The net worth ratio for the credit union industry rose from 11.13 percent as of March 2019 to 11.27 percent as of June 2019.
At the end of June 2019, 98.42 percent of credit unions had a net worth ratio of at least 7 percent, the minimum requirement for being well-capitalized. On the other hand, 0.59 percent of credit unions or 31 credit unions had a capital ratio below 6 percent.
Assets, Loans, Shares, and Members Increase
Total assets were $1.5203 trillion at the end of the quarter, up $14.3 billion during the quarter.
Outstanding loans at credit unions were $1.0664 trillion at the end of the second quarter. This was up $18.1 billion from March 2019. All major loan categories posted a gain during the second quarter.
Shares (deposits) at credit unions increased by $7 billion during the quarter to $1.2798 trillion.
Since loan growth outpaced share growth during the second quarter of 2019, the loan-to-share ratio rose from 82.4 percent at the end of the first quarter to 83.3 percent at the end of the second quarter. The loan-to-share ratio exceeded the 10-year average of 76.32 percent.
There were 118.3 million credit union members as of June 2019, up from 117.2 million members as of March 2019.
Delinquencies Rise, Net Charge-offs Lower
Delinquent loans increased from $6 billion as of March 2019 to $6.8 billion as of June 2019. The industry's delinquent loan ratio went from 0.58 percent to 0.63 percent.
Over the same period, net charge-offs fell from $6 billion to 5.9 billion. The net charge-off rate declined by 1 basis point to 0.56 percent at the end of June 2019.
Fewer Credit Unions, But More Are Low-Income
The number of credit unions fell by 27 during the second quarter to 5,308. The number of low-income credit unions increased by 47 during the second quarter to 2,618.
Review the quarterly data summary.
Read the Trend Chartbook.
Elevations CU to Acquire Cache Bank & Trust
Elevations Credit Union (Boulder, CO) has announced its intention to acquire the assets of Cache Bank & Trust (Greeley, CO).
Elevations CU has almost $2.1 billion in assets. Cache Bank & Trust has $121.7 million in assets and three locations in Denver, Fort Collins, and Greeley, Colorado.
It is anticipated that the acquisition will be finalized in the first quarter of 2020 with full integration of the two organizations by the third quarter of 2020. The acquisition is subject to regulatory approval.
The price tag of the deal was not disclosed.
This deal will be the first community bank in Colorado to be acquired by a credit union.
Press release can be found here.
Elevations CU has almost $2.1 billion in assets. Cache Bank & Trust has $121.7 million in assets and three locations in Denver, Fort Collins, and Greeley, Colorado.
It is anticipated that the acquisition will be finalized in the first quarter of 2020 with full integration of the two organizations by the third quarter of 2020. The acquisition is subject to regulatory approval.
The price tag of the deal was not disclosed.
This deal will be the first community bank in Colorado to be acquired by a credit union.
Press release can be found here.
Tuesday, September 3, 2019
The Wall Street Journal Reports on CUs' Bank Buying Spree
Credit unions buying banks have attracted the attention of The Wall Street Journal.
The story notes that while most credit union mergers are with other credit unions, credit unions have recently gone on a buying spree.
Since the beginning of 2018, credit unions have announced 21 banks deals. In comparison, there were only 12 deals announced during the prior five years.
In fact, this year a record number of deals have been announced.
Critics point out these "deals illustrate how competitive credit unions have become, given their tax advantages, lack of shareholders and diminishing constraints on growth."
Credit unions contend that these deals allows them to expand their footprint and product offerings. In addition, credit unions claim these acquisitions represent a good return on their investment.
Making news, National Credit Union Administration (NCUA) Chairman Rodney Hood told The Wall Street Journal that the agency plans to introduce a proposed rule later this year clarifying the regulatory responsibilities of credit unions when acquiring banks.
I will be interested in reading what NCUA proposes. Hopefully, the agency will remove many of the barriers that keep banks from acquiring credit unions.
Read the story (subscription required).
The story notes that while most credit union mergers are with other credit unions, credit unions have recently gone on a buying spree.
Since the beginning of 2018, credit unions have announced 21 banks deals. In comparison, there were only 12 deals announced during the prior five years.
In fact, this year a record number of deals have been announced.
Critics point out these "deals illustrate how competitive credit unions have become, given their tax advantages, lack of shareholders and diminishing constraints on growth."
Credit unions contend that these deals allows them to expand their footprint and product offerings. In addition, credit unions claim these acquisitions represent a good return on their investment.
Making news, National Credit Union Administration (NCUA) Chairman Rodney Hood told The Wall Street Journal that the agency plans to introduce a proposed rule later this year clarifying the regulatory responsibilities of credit unions when acquiring banks.
I will be interested in reading what NCUA proposes. Hopefully, the agency will remove many of the barriers that keep banks from acquiring credit unions.
Read the story (subscription required).
Average CEO Compensation at Large State Chartered CUs Was $1.16 Million for 2017
The average total compensation for CEOs at large state chartered credit unions with at least $1 billion in assets was $1.16 million for 2017. This is the fourth consecutive year were the average compensation topped $1 million.
The median total compensation for 2017 was almost $803 thousand.
Total compensation includes base salary, bonus and incentives, other reportable income, retirement and deferred compensation, and nontaxable benefits.
Compensation information was obtained from Form 990s filed by 154 state chartered credit unions with at least $1 billion in assets.
At the time this blog post was being written, Form 990s for 2017 were not available for the following credit unions -- Collins Community Credit Union (IA), CFCU Community Credit Union (NY), Melrose Credit Union (NY), Municipal Credit Union (NY), Public Service Employees Credit Union (CO), and Rogue Credit Union (OR).
Mean and median base compensation was $512,148 and $489,783, respectively. The CEO with the highest base salary was Crystal Long of GECU (El Paso, TX) at $1,680,474.
Mean and median incentives and bonuses were $212,134 and $116,416, respectively. Most large CU CEOs received some sort of incentive or bonus compensation.
The data on base compensation and incentives and bonuses excludes information from Lake Michigan Credit Union (MI), because Lake Michigan CU combined base compensation with bonuses and incentives.
Fifty-eight credit union CEOs earned total compensation of $1 million or more in 2017.
The highest paid CEO was R. Heldebrant of Star One Credit Union (CA) with total compensation of $12,465,866 for 2017.
Update
The Form 990s are now available for Canvas CU, CFCU Community CU, Collins Community CU, and Rogue CU. This information has not been incorporated into the statistical analysis of CEO compensation.
Darryl Marksberry of Canvas CU (CO) had total compensation of $771,721 with base pay of $500,941 and bonus and incentive compensation of $225,000.
Lisa Whitaker of CFCU Community CU (NY) had total compensation of $1,283,914. Base compensation was $498,687 and incentive and bonus compensation was $173,918.
Stephanie Rupert of Collins Community CU (IA) had total compensation of $476,183 with a base pay of $308,653 and incentive and bonus pay of $112,499.
Eugene Pelham of Rogue CU (OR) had total compensation of $940,376. Base pay was $472,885. Bonus and incentive pay was $117,248.
The following table lists the 10 highest paid large state chartered credit union CEOs in 2017.
Below is the list of CEO compensation at state chartered credit unions with at least $1 billion in assets (click on images to enlarge).
The median total compensation for 2017 was almost $803 thousand.
Total compensation includes base salary, bonus and incentives, other reportable income, retirement and deferred compensation, and nontaxable benefits.
Compensation information was obtained from Form 990s filed by 154 state chartered credit unions with at least $1 billion in assets.
At the time this blog post was being written, Form 990s for 2017 were not available for the following credit unions -- Collins Community Credit Union (IA), CFCU Community Credit Union (NY), Melrose Credit Union (NY), Municipal Credit Union (NY), Public Service Employees Credit Union (CO), and Rogue Credit Union (OR).
Mean and median base compensation was $512,148 and $489,783, respectively. The CEO with the highest base salary was Crystal Long of GECU (El Paso, TX) at $1,680,474.
Mean and median incentives and bonuses were $212,134 and $116,416, respectively. Most large CU CEOs received some sort of incentive or bonus compensation.
The data on base compensation and incentives and bonuses excludes information from Lake Michigan Credit Union (MI), because Lake Michigan CU combined base compensation with bonuses and incentives.
Fifty-eight credit union CEOs earned total compensation of $1 million or more in 2017.
The highest paid CEO was R. Heldebrant of Star One Credit Union (CA) with total compensation of $12,465,866 for 2017.
Update
The Form 990s are now available for Canvas CU, CFCU Community CU, Collins Community CU, and Rogue CU. This information has not been incorporated into the statistical analysis of CEO compensation.
Darryl Marksberry of Canvas CU (CO) had total compensation of $771,721 with base pay of $500,941 and bonus and incentive compensation of $225,000.
Lisa Whitaker of CFCU Community CU (NY) had total compensation of $1,283,914. Base compensation was $498,687 and incentive and bonus compensation was $173,918.
Stephanie Rupert of Collins Community CU (IA) had total compensation of $476,183 with a base pay of $308,653 and incentive and bonus pay of $112,499.
Eugene Pelham of Rogue CU (OR) had total compensation of $940,376. Base pay was $472,885. Bonus and incentive pay was $117,248.
The following table lists the 10 highest paid large state chartered credit union CEOs in 2017.
Below is the list of CEO compensation at state chartered credit unions with at least $1 billion in assets (click on images to enlarge).
Monday, September 2, 2019
First Community CU Pays $2.3 Million for Naming Rights to University Arena
First Community Credit Union (Chesterfield, MO) has acquired the naming rights for the arena within Southern Illinois University Edwardsville’s Vadalabene Center for $2.3 million over the next 10 years.
The facility will be known as First Community Arena at the Vadalabene Center.
The naming rights deal can be extended for an additional two years.
Read the press release.
The facility will be known as First Community Arena at the Vadalabene Center.
The naming rights deal can be extended for an additional two years.
Read the press release.
Sunday, September 1, 2019
Alliant CU Provides $12.1 Million in Commercial Real Estate Financing
Alliant Credit Union (Chicago, IL) refinanced three-property self-storage portfolio for the principal amount of $12.1 million.
According to RE Journal, the properties in Evansville (IN) and Pine Bluff (AR) encompass 1,565 total units, including a mix of standard units, climate-controlled units and outdoor vehicle storage.
Read the story.
According to RE Journal, the properties in Evansville (IN) and Pine Bluff (AR) encompass 1,565 total units, including a mix of standard units, climate-controlled units and outdoor vehicle storage.
Read the story.
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