The July 2009 Financial Report
This post focuses on Priority One Credit Union's financials for the month of July 2009. The amount of Net Income for the month of July and the amount of year-to-date net income are shown below.
Net Income (Loss)
Month-to-Date
-$87,774.10
Year-to-Date:
-$4,033,555.89
As reported in our last post, President Charles. R. Wiggington, Sr. has recently been vocal and declaring that business is in his words, "great", "growing", and "improving." If business is in fact improving, it isn't apparent by the credit union's reports which inarguably show a negative balance in net income.
The amount of net income reported for the month of June was -$92,677.61 which is undoubtedly higher the -$87,774.10 reported for the month of July. In that sense, business has improved though it doesn't change the fact that Priority One remains in a financial hole. July 2009 marks almost one year that the credit union has not generated profit. Of course, President Wiggington might insist that the amount of losses reported for the month of July are less than the amount of losses reported for the month of June and he would be right, but then again a loss is a loss which also means, Priority One is not generating profits.
Several months ago, due to the credit union's inability to acquire new business at levels that would offset overhead and generate profits. President Wiggington implemented expense reductions, including a wage freeze on the salaries of non-exempt personnel and what he describes as a temporary suspension of all promotions. However, his reductions have not been applied to raises and promotion of management personnel.
The President's so-called reductions have also not brought a cessation to his undisciplined spending. A few months ago, he approved the purchase of a teller cash machine for the new Airport branch. The cost of the machine exceeded $45,000. However, the President chose not to purchase the software needed to bring the teller cash machine online and so the expensive machine remains unused, lying in a storeroom at the main branch.
A few months ago, Board Chair, Diedra Harris-Brooks experienced problems using her VISA Check Card and called the main branch, complaining that the President should have purchased a card embosser that would have provided the credit union with the ability to print check cards. An embosser was ordered and delivered to South Pasadena but like the teller cash machine, the embosser remains unused, lying in the brnach vault, collecting dust.
During May's annual meeting, President Wiggington stated to attendees that he is now
working smarter." Is spending money on expensive equipment that is not be used an example of his improved intellect?
working smarter." Is spending money on expensive equipment that is not be used an example of his improved intellect?
The credit union's net capital has failed to 6.35% while delinquencies continues to increase as a result of delinquent mortgages. The credit union has reported losses due to delinquencies in excess of $4 million.
And though the President promised throughout 2007 that he was going to implement a retention program that would reduce account closures, to date there is no indication of when or if his alleged retention program will ever be realized.
In July 2009, the credit union reported charge-offs in the amount of $118,154.84. At the time, the credit union had only budgeted $60,000 to cover charge-offs.
In an effort to reduce losses, the credit union has sold a large number of its real estate loans to Fannie Mae, an agreement which will be finalized later this month. The President plans to generate income from the sale of the loans and decrease, the interest rate risk on 30-year mortgage loans. The President has recently said he intends to use the proceeds from the sale of loans to enter into a business relationship with America's Christian Credit Union. He says that funding church loans for a period of 5-years will reap higher yields than are being gotten through Priority One's current home loans.
Due to the length of the credit union's July Income Statement, we've decided to provide excerpts of the report.
ASSETS
LOANS
$114,032,903.98
LESS ALLOWANCE FOR LOSSES
$2,600,000.00
NET LOANS
$111,432,903.98
ACCOUNTS PAYABLE
$3,034.565.77
CASH
$2,899,352.03
INVESTMENTS
$58,570.858.94
INVESTMENTS IN COOP
$40,000.00
INVESTMENT IN FSCC
$24,000.00
NCUA DEPOSIT
$1,284,522.90
B. LIABILITIES AND EQUITY
Accounts Payable
-$464,571.77
Notes Payable
$20,000,000
(the above reference is for the 2008 loan borrowed from the credit union's line-of-credit)
Accrued Expenses
$486,721.02
Dividends Payable
$14,156.00
Suspense Accounts
$0.00
Other Liabilities
$15,979.68
Shares
$149,544.801.20
Total Liabilities
$169,497.086.13
C. EQUITY
Regular Reserve
$5,128,606.33
Undivided Income
$7,575.844.62
Total Equity
$12,704,450.95
Total Liabilities and Equity
$182,201.537.08
D. OPERATING INCOME
Interest on Loans
Month-to-Date
$585,661.74
Year-to-Date
$3,883,228.10
Income from Investments
Month-to-Date
$159,454.07
Year-to-Date
$992,625.31
Fees and Charges
Month-to-Date
$232,799.17
Year-to-Date
$1,472,193.80
E. OPERATING EXPENSES
Employee Salaries/Bonus
Month-to-Date
$332,276.31
Year-to-Date
$2,163.265.05
Employees have not gotten bonuses in years, so a part of this amount must be for bonuses awarded to the President
Telephone Expenses
Month-to-Date
$27,700.67
Year-to-Date
$193,299.97
Does this include the amount be paid each month for the $600,000 telephone system purchased by the President in 2008?
Equipment Maintenance
Month-to-Date
$35,573.32
Year-to-Date
$232,082.41
What equipment are the above amounts referring to?
Education Expense: Staff
Month-to-Date
$1379.51
Year-t0-Date
$10,541.05
What education is this referring to? The credit union provides no materials during periodic classes taught by Robert West.
Education Expense: Senior Mgmt
Month-to-Date
$0.00
Year-t0-Date
$3834.15
Senior Management has not been enrolled in classes. So what is the above education expense for?
Education: Supervisory Committee
Month-to-Date
$1224.62
Year-t0-Date
$9227.26
Does the $9227.26 constitute money spend sending the supervisors to Hawaii and Las Vegas?
Education: Board of Directors
Month-to-Date
$0.00
Year-t0-Date
$960.00
What exactly was $960.00 spent on? We know it wasn't related to education.
Training Expense
Month-to-Date
$1788.79
Year-to-Date
$11,213.82
Training expense? How so? We think this is an example of "cooking the books" and the President may have posted monies spent sending the Directors and Supervisors to Hawaii and Las Vegas under this heading.
Member Research
Month-to-Date
$0.00
Year-to-Date
$0.00
No money spent on "member research." Enough said.
Real Estate Expense
Month-to-Date
$0.00
Year-t0-Date
$0.00
Elimination of all real estate loan funding except HELOCS.
Legal Expenses
Month-to-Date
-$1399.92
Year-to-Date
$77,302.54
Why has so much been spent on legal? When Mr. Harris was President, legal spending approximated $20,000 to $22,000 per year. It is only August and the credit union has already spent more than $77,000 on legal. Why?
Consultancy Fees
Month-to-Date
$3750.00
Year-to-Date
$33,185.04
An outrageous amount spent on consultants and yet, there is nothing to show for it.
Shared Branching Expense
Month-to-Date
$4936.24
Year-to-Date
$32,443.17
So how much return is the credit union getting in return for spending more than $4000.00 each month to participate in Shared Branching?
Provision for Loan Losses
Month-to-Date
$118,154.84
Year-t0-Date
$2,005,960.86
NCUSIF Stabilization Expense
Month-to-Date
$0.00
Year-to-Date
$1,111,125.73
Interest on Borrowed Money
Month-to-Date
$60,569.05
Year-to-Date
$413,885.55
This is the interest being paid out against the $20 million loan borrowed by the President. Is this an example of what he has said is "thinking smarter"?
Annual Meeting Expenses
Month-to-Date
$97.09
Year-to-Date
$51,522.40
There is no way, the credit union spent more than $50,000 on the annual meeting. The frugally put together affair could never have cost this amount. So what was did the credit union spend that cost more than $50,000?
Board of Directors/Supervisors
Month-to-Date
$1077.71
Year-t0-Date
$8201.96
Why was this much money spent?
Branch Expenses
Month-to-Date
$0.00
Year-to-Date
$0.00
Other Losses
Month-to-Date
$6931.10
Year-to-Date
$47,403.94
Ballot Incident Expense
Month-to-Date
$0.00
Year-to-Date
$0.00
Why has the President not posted how much money was spent on reprinting and re mailing of ballots after he and Board Chair, Diedra Harris Brooks, violated state law and tried to limit how many members were receive notification of the election?
Total Operating Expenses
Month-to-Date
$942,446.10
Year-t0-Date
$8,802,343.28
Income (Loss) from Operations
Month-to-Date
$46,767.74
Year-to-Date
-$2,300,169.75
Dividends Paid
Month-to-Date
$0.00
Year-t0-Date
$0.00
Loss (Gain) on Disp of Assets
Month-to-Date
$0.00
Year-t0-Date
$0.00
Loss (Gain) on Disp of Investment
Month-to-Date
$0.00
Year-t0-Date
$712, 133.81
Total Dividends & Other Income
Month-to-Date
$134,541.84
Year-t0-Date
$1,703,386.14
NET (LOSS) INCOME
Month-to-Date
-$87,774.10
Year-to-Date
-$4,003,555.89
There are numerous questionable entires which we've noted. We don't believe this President has provided an accurate or actual record of Priority One's financials.
We're uncertain if the President's recent stories alleging improvements to business are just more of his obsessive exaggerations or does he really believe business is improving when the credit union's actuarials prove business is in decline. For the moment and contradictory to the President's far-fetched stories, Priority One lies mired in the red. And no one knows when the President and his ignorant cronies will find a way of extricating the company from where it lies trapped.
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14 comments:
There is nothing that guarantees that selling loans to fannie mae or pushing the collection dept is going to fix Priority's problems. In fact, if he has the answers to fix the cu, then don't you think he would have done something months ago instead of waiting until the cu was over $4 million in the negative?
Each day Wigg does less and less. This week he walked thru the office just to walk and he's talking loud again except when he is in the loan department. Rodger looks really tired and overworked. Yuling more quiet than usual and Manny seems miserable. You want to
cut back on $ and useless people, get rid of Wiggington.
As the Anonymous Voyeur, I haven't posted a comment in a while although I have enjoyed watching the train wreck in super slow motion.
I predict the ATM/debut/credit card embosser will be advertised to the membership as a way of putting the members first by letting them pick their own PINs Doesn't that sound like a Priority 1 spin on things?
I also predict that the credit union will upload the member selected PINs to the various card processors. This will result in a near catastrophic failure during a major card reissue cycle. Uploading PINs is a dull and boring task at the end of the day and the FSRs will likely put that work aside until they have some "spare time tomorrow." We all know or can be reasonably certain that will not happen.
The only question is which employee will be blamed for the reissue failure.
Wiggington became president in Jan. 07. Its now Aug. 09 and he is just now making changes to turn business around?
If he knew what he was doing, he would have done something a year ago when the clues showed P1 might be getting in trouble. A competent Pres would have had a back up plan. I said competent.
Selling mortgage loans to Fannie Mae will bring income to the P1 but will it be enough to turn the cu around. Its like getting quick cash by having a yard sale. I don't think its a solution that can help P1 over the long haul.
The board is just so ignorant. They don't know what they're doing so they rather trust this clown and let him sink the whole credit union.
And when did Diedra buy the credit union? She gets pissed and Wiggington buys an embosser. These people know nothing about spending much less finances.
And Anonymous, I think you are right,that would be the way Priority 1 puts a spin on things.
I want to know why Priority's legal expenses for this year are already up to $77,302.54
The report shows they paid $60,569.05 on interest in July on the $20 million borrowed in 08 and YTD they have paid $413,885.55. Maybe they can't afford to pay the principle. If that's the case, they are probably in big trouble. I wonder if they are being completely truthful on the report.
Maybe you don't know but this week a consultant met with some employees who were given to tests to see what types of personality they have. I was told that after the meetings only some employees were called to meet with the consultant 1 on 1. More money spent on something P1 can't afford. He wastes money on the stupid phone system, buys machines branches don't need, promotes people who he later fires. How much did they pay the consultant? I think Wiggington trying to target some employees at least that't what it looks like.
You want to know something not so funny. The embosser has been there for 2 years now. Just a big carboard box that takes up space. It hasnt even been opened to see if they got the right machine or a crate of bricks. Now that there is a complaint maybe it will be put to use. Card Services should be the one in charge of that since the FSRs are always busy and Card Services dont always seem to be. I'm not trying to talk bad about Card Serv. I am just saying. It just seems like Member Service and Loans get all the work
You can tell who Wiggington likes by who doesn't have to work as hard. The loan dept and member service answer phones and help walk-ins which is fine but the card supervisor told him when he promoted her she was not answering phones and she doesn't but member services has to do card service work.
You are right anonymous. Card Services come to work late and dont really like to help too much. If someone calls them is like pulling teeth to get help. While Member Service and Loans have to do all the work. Answer phones constantly, help walk in members, answer phones, do paperwork, help branches and did I mention anwering phones. Does not sound right.
Gives more time to do that ebay side business.
And Wigg knows about her ebay business on company hours but he likes her, so its okay.
There is always a chance that the cu could survive but Wiggington would have to step down for that to happen. He won't do that because he has so often said a lot of people have tried to get him out but he beat them all (talked them to death). The cu is in more trouble than he makes it seem and he is spending lots of money trying to get upgrades so auto services improve & of course, hiring companies to help him get the staff on board but he has made P1 a miserable place to work at and employees feel unhappy becuase he has made the work environmt horrible. He is like a big ball of negativity but is to dumb to know it.
Your right Charles has way too big of an ego to step down and because of his big head
In a way it’s nice to see the failure that he his. Everything he has done has brought the credit union down and in a bad state, who knows we might even merger with America’s Christian Credit Union's. What is hard to understand is that the board is so stupid, I can not believe that have done nothing about that idiot. Most of the board has been there along time can
The real know noting about running a credit union.
Wake up we are in a ship wreck and going down!!!!!!!!!! Do you not read the board report?
And see all the problems that we have, can you not see that Charles is a liar and a big time
THIEF!!!!!!!!!!!!
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