More on OnPoint Credit Union's fourth quarter
Last week we noted with some surprise that OnPoint Community Credit Union, our barometer of the Portland economy, had suddenly changed its fourth quarter 2008 operating results from a profit to a loss. Thanks to our readers, we learned that this was as a result of some toxic assets in other, larger credit unions in the insurance pool with OnPoint, but that explained only part of the newly disclosed losses. Then we learned that OnPoint has hired a new chief financial officer, with no kind words said for its former officer in that position, who had been there for many years.
Prowling around on the internet for new information about this, we found another document that adds to the puzzle. This is the glossy annual report that OnPoint hands out to the world. Dated in March, this document disclosed the hit that was taken due to the insurance pool loss, but it still showed a profit for the year. This confirms our hypothesis that its auditors found other things, running into the millions, that had to be fixed before the final annual figures were set.
The glossy report disclosed in a footnote "the $16.9 million impact of member insurance and NCUSIF impairment costs that resulted in 2008 from National Credit Union Administration (NCUA) regulatory actions, and related impacts." But sanitizing that out, the "pro forma" income statement that the OnPoint brass reported showed the same $22,569,000 annual profit revealed in its "call" report in January.
Something else changed since March, because even subtracting out a $16.9 million insurance "impact," OnPoint would have shown a profit of $5,669,000 for the year. Indeed, no doubt embarrassingly in retrospect, the top brass at OnPoint included the following brag statement in the glossy report:
Although OnPoint, along with the rest of the nation's 8,300 credit unions, paid an assessment as part of the NCUA's Corporate Stabilization Program, due to our outstanding performance and sound management/business practices, our net income still showed a sizeable profit.Not. The numbers submitted in April to the NCUA -- presumably, audited numbers -- showed a loss for the year of $2,871,665. That's an $8.5 million change, beyond the "$16.9 million impact" discussed in the managers' narrative.
Looking at the two quarterly reports filed with the regulators, the changes on the income statement were as follows: The provision for loan and lease losses was increased by $1,200,000; gain and loss on investments changed from a gain of $979,626 to a loss of $3,367,886; and member insurance expense went up from $93,709 to $19,986,634 -- a change of nearly $19.9 million, not $16.9 million.
Whatever's been going on among the bean counters at OnPoint the last few months, it hasn't been a mellow time. Members can only hope that things calm down a bit going forward.