From The Desk of the CEO
Our Newsletter | Current
How Are We Doing Compared to the Plan?
For those of you who capitalized Missouri Corporate Credit Union (MCCU) you might be interested in how we are performing against the Strategic Plan approved for release by the NCUA for the re-capitalization process. For credit unions interested in joining MCCU, I’m certain you are curious about how well we are doing and what the future holds.
Regarding the NCUA capital standards, the most critical target facing us is compliance with the 45 basis points(bps) retained earnings requirement that must be met by September 30, 2013. The Strategic Plan approved for release by the NCUA in May 2011 and used for the re-capitalization effort, projected a retained earnings ratio of 38 bps in December 2012 followed by a retained earnings ratio of 53 bps in September 2013. As of December 31, 2012 our retained earnings ratio is 39 bps, slightly above projections. Our current budget projects a retained earnings ratio of 53 bps in September 2013, right on target with the Strategic Plan and well above the 45 bps requirement. We are happy to report that MCCU achieved the 45 bps retained earnings ratio milestone as of the end of February 2013.
The NCUA also requires corporates to have a Leverage Ratio of 4.00%, a Tier 1 Risk-Based Capital Ratio of 4.00% and a Total Risk-Based Capital Ratio of 8.00% at September 30, 2013. As of December 31, 2012, Missouri Corporate’s Leverage Ratio is 6.88%, the Tier 1 Risk-Based Capital Ratio is 65.4% and the Total Risk-Based Capital Ratio is 71.8%, all well above the regulatory minimums required at September 2013.
In addition, as of December 31, 2012 our base case Net Economic Value ratio is 9.70%, well above the 2.00% minimum. The NEV decline in the up 300 bp scenario is -11.17%, well inside the regulatory maximum of -15.00%. Finally, our asset Weighted Average Life (WAL) is 0.60 years, well below the regulatory maximum of 2.00 years. Missouri Corporate’s investment portfolio consists of government agency securities, insured bank CDs, and investments in the Federal Reserve Bank of St. Louis.
To those credit unions that provided capital that well exceeded our goal, thank you! To those that are interested in joining a vibrant, successful, safe corporate credit union, please contact Michelle Thompson at email@example.com for more information.
Dennis J. DeGroodt, CCUE, CUDE
Missouri Corporate Credit Union