Post Office Credit Union is one of the smaller credit unions in the Madison area, but it is one of the strongest, according to two independent financial institution ratings services.
A look at some of the credit union?s key financials may explain why:
? Of all of its loans, only 0.16 percent are more than 60 days late being paid.
? For the first six months of this year, Post Office Credit Union has had to write off a net $13,111 worth of loans as being uncollectible, only .0006 percent of total loan volume.
? Post Office Credit Union has a capitalization ratio of 18.8 percent, as of June 30. The National Credit Union Administration, the federal agency that watches over the industry, considers credit unions to be well capitalized ? or have an adequate cushion in case loans go bad ? when their capitalization ratio hits 7 percent.
?We?ve been very fortunate. We have not had much in the way of real estate losses ? none, so far this year and one last year,? said Kevin Yaeger, president of Post Office Credit Union. ?I?m sure I?m the envy of some and the bane of others. I do, kind of, skew the peer group a bit.?
With nearly 3,400 members and $38.2 million in assets, Post Office Credit Union drew a five-star ?superior? rating from Bauer Financial and a four-star ?sound? rating from Bankrate.com based on March 31 data submitted to federal regulators.
Of 29 credit unions in south-central Wisconsin, only two others fared as well: the much bigger First Community Credit Union of Beloit and the even smaller Webcrafters Employees Credit Union.
Solid footing
Overall, the area?s credit unions performed fairly comparably to their year-ago assessments. In both years, Bankrate.com withheld its highest five-star rating from any of the institutions but didn?t give any its lowest one-star rating, either. Bauer Financial found 13 local credit unions met its five-star ?superior? qualifications, down from 18 a year ago, but gave no two-star ?problematic? or one-star ?troubled? designations either year.
The area?s largest local credit union, Summit, of Madison, drew four-star ratings from both services, while Landmark, of New Berlin, the biggest credit union in Wisconsin, garnered four stars from Bauer Financial and three stars from Bankrate.com.
Statewide, Wisconsin credit unions reported an 83 percent growth in total net income for the first six months, compared to June 30, 2011, the state Department of Financial Institutions said. A significant portion of that came from an 11 percent drop in provisions for loan-loss expense.
Meanwhile, the 194 state-chartered credit unions had a combined return on investment of 0.9 percent, up from 0.59 percent as of Dec. 31, 2011, and the highest it has been since 2005, DFI said. Total assets rose $1.2 billion from Dec. 31 to $23.1 billion, and the loan delinquency ratio statewide was 1.55 percent, down from 1.83 percent in December, and ?nearing pre-recession levels,? said Ginger Larson, director of the state Office of Credit Unions.
Long history
Post Office Credit Union was founded in February 1930 as Madison Federal Employees Credit Union. ?We have the distinction of being Madison?s first (credit union),? Yaeger said. Chartered to serve local employees of any federal agency, the credit union adopted its current name in 1932. It was already the organization?s nickname since it was housed in the old main post office Downtown, at 215 Martin Luther King Jr. Blvd., now the Madison Municipal Building.
The credit union took three big steps in 1996: Constructing its own building at 151 W. Corporate Drive; paying an annual bonus dividend to savers based on their accounts? earnings; and rebating part of the interest they have paid on loans each year.
?Between those two programs, we have returned to our members almost $1.6 million,? Yaeger said.
Today, it?s not just government employees who can join Post Office Credit Union. The organization opened its doors 10 years ago to anyone working or living in Dane County.
Lost to mergers
While few area credit unions are viewed by the ratings services as struggling, six in south-central Wisconsin have merged out of existence since July 2011:
? TCU 579, Janesville, merged into Heartland, Madison.
? Members Serving Members, Beaver Dam, combined with Dodge Central, Beaver Dam.
? Rock County Employees, Janesville, joined First Community Credit Union of Beloit.
? Rio merged into Kilowatt, Madison.
? Madison VA Employees became part of Dane County Credit Union, Madison.
? Truax merged into Heritage, Madison.
That?s not unusual, Larson said. There were 12 credit union mergers in Wisconsin in 2010 and 19 in 2011, one of which involved an out-of-state organization.
So far in 2012, 10 credit union mergers have occurred in Wisconsin.
Reasons are ?the same as they always have been,? Larson said, in an email exchange, including: competition; member requests for products and services that smaller credit unions cannot provide; or strengthening the credit union for the future.
Sally Dischler, chief executive of Heartland Credit Union, said her organization took up TCU 579 mainly because of location, when the Janesville credit union sought a partner.
?Rock County is within our field of membership. We already had a lot of existing members in Milton, Edgerton and the Janesville area but we did not have a branch presence,? Dischler said.
Heartland received a four-star rating from Bauer Financial and three stars from Bankrate.com, up from two stars a year ago.
Dischler said adding TCU 579 probably was a benefit to both credit unions. ?It was a fairly small merger so, yes, it does strengthen you because you have that growth,? she said.
Jordyn Wieber michael phelps Kerri Strug Ledecky Nadia Comaneci Rebecca Soni Snoop Lion
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