"I know it’s wrong, but I don’t care.” - M. Corleone **
"Where can you find an acquiring credit union, which will take another one on with no capital?"
Forget those ideals of cooperative principles, "people helping people", local member-ownership and control; our troll is obviously clueless about the core economic worth of a credit union. Unfortunately, credit union boards also appear to be deeply in the dark. At least one hopes it's ignorance, not cupidity.
Everyone selling a business seeks to determine "what it is worth", a fair price, a fair value. An owner wants best value, folks like the IRS want their share too.
Valuation of a credit union as a business is straightforward, since the assets and liabilities are pretty uniform (loans, investments, some buildings and equipment, member deposits, and reserves).
Credit unions are also heavily scrutinized by both regulators and CPAs to assure that financial statements reflect a fair representation of the approximate value of each holding. Both loans and investments are regularly adjusted to reflect potential losses in value. If everyone is doing their job, when looking at a credit union balance sheet; for the most part, "what you see is what you get" in terms of "book value" of the institution.
The formula for the "book value" of SAFE CU - if the Board were selling it rather than giving it away - is Assets (loans, investments, buildings, etc) minus Liabilities (member deposits, CDs, IRAs, etc) equals Equity (also referred to as book value, net worth, reserves, or capital). A-L=E!
For SAFE that would be (A) $4.4 billion in loans/investments minus (L) $4 billion in member deposits = (E) $400 million in equity/reserves which is owned by SAFE members - and available for distribution (@%1,639 per member).
😎 ' Course that only applies if the SAFE CU Board chose to sell the credit union, not give the members' equity/reserves away.
Last time I checked, credit unions were classified as not-for-profits, not charities... $400 million is a large gift of other people's money!
** For the entire Godfather series click the "Godfather" button at top.
the flock is being fleeced ... where are 'the good Shepards'?
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