| Title: | DCU |
| Notice: | 1996 BoD Election results in 1004 |
| Moderator: | CPEEDY::BRADLEY |
| Created: | Sat Feb 07 1987 |
| Last Modified: | Fri Jun 06 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1041 |
| Total number of notes: | 18759 |
Regarding the latest statement of conditions recently posted as note
272.36.
Interesting. Notice the $3.6M in "INVESTMENT IN CUSO" going down to $0
this month. That 'INVESTMENT' was where they carried the remainder of
the bad real estate loans on the books. They've now written off that
$3.6M. You'll notice that "OTHER REAL ESTATE OWNED" went up by
$0.5M. That may have been caused by some of this bad loan investment
being backed by a poultry $0.5M. The effect of all this is very clearly
shown in the change in equity line. Note that owners (that's OUR)
equity decreased by $3.8M ie a whopping 27.4% from $13.8M to $10.0M.
Note also that this decrease in equity was even larger than the
writeoff from the CUSO (I wonder if DCU is now making an operating loss
in addition to the special chargeoff losses?).
An interesting figure to now calculate is Chuck Cockburn's
EQUITY/ASSET ratio. It is now $10M/$360M = 2.78%. I'm sure this will
be causing the NCUA to be getting more interested in DCU. One more
major faux par and there goes all the equity. A far cry from those
fabricated 'example' credit union balance sheets Chuck was parading at
his meet the owners sessions. Chuck has put it on record as saying that
he'd like to see an equity to asset ratio of about 8%. Well folks to
reach that kind of ratio the credit union needs another $18.8M of
equity on top of the $10M it is now left with. Guess what that money
will indirectly be coming out of our pockets through higher spreads
between loans and savings interest rates. And also no doubt more fees.
Now hopefully people can see why DCU tried to surupticiously introduce
new fees under the guise of 'more choices'. They know damn well that
a load of the assets they were carrying were worthless (now written
off) and that once written off it would kill the equity and hence
the equity/asset ratio. Pity the board didn't ensure that DCU
management were straighter with us. But that's what I've come to expect
from the current board. It is now even more abundantly clear to me that
we need a complete new board that TRULY REPRESENTS the average
shareholder. Not a bunch of finance majors who think they're running
their own private bank.
My message to everyone is get out and vote. I and several other people
are working hard to ensure that there will be a good choice of
candidates petitioned by the membership to vote for.
Dave
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 428.1 | More on disappearing equity | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Wed Jan 22 1992 19:21 | 26 |
A few more comments on equity.
I just looked back at previous statements of condition. It looks like
owner equity reached a high of $18.6M in November of 1990 (that's if
you ignore the spike up to $19.9M in August 1991 which is when the
$6M bond received against MANGONE hit the books but before a lot of the
writeoffs were done. Well now we're down to $10M equity. Let's just
consider for a moment that we'd now be at $4M equity if there hadn't of
been a $6M bond. $4M is basically peanuts for an asset base of $360M.
The DCU would be a hair from being insolvent. This is how close the
current incompetent board allowed the DCU to come to insolvency.
Where were the checks and balances? Why wasn't ANYONE on the board
awake? How come the treasurer (Susan Shapiro who is running again)
interpreted an 87% drop in net income for 1990 as "DCU's financial
performance improved with Net Income for 1990 on target at .8% or
$.3 million"? Even somebody who knows basic arithmetic will know that
a vast drop in money earned is not an improvement.
No wonder 5 of the board have decided not to run again. Too
embarassed no doubt. One wonders how things would be now if a few
concerned shareholders hadn't taken a hard look at what was going on at
the DCU and pushed for the special meeting.
It's time for a change at the top. Let's have some people who represent
the average shareholder.
Dave
| |||||