The Financial Performance Report
for the
Quarter Ending 1/31/09
Priority One Credit Union's Monthly Income Statement/Balance Sheet for the quarter ending January 31, 2009 is now available and we've immediately noticed that there is no reference to the amount of monies spent to send Directors and Supervisors to junkets. In fact, the credit union's quarterly Financial Performance Reports ("FPR's") for the entire year of 2008 make absolutely no reference to expense incurred from junkets which flew Directors and Supervisors to Hawaii and more recently, to Las Vegas.
Junkets are touted as educational and an opportunity for Directors and Supervisors to hone their skills so they can better carryout their appointed responsibilities. The problem at Priority One Credit Union is that Directors and Supervisors have no skills to boast of. Both sets of officers rely entirely on the President to interpret the credit union's financial reports and both have proven they are incapable of reversing the problems caused by the President's reckless business decisions and embarrassing personal behaviors, all of which are ebbing away at the credit union's once stable financial standing. Please note that under the headings, "Education Expense-Supv Committee" and Education Expense-Board of Director" the amount of money spent in January 2009 was "0.00." The omission might be due to oversight, shoddy record keeping or be just another example of Charles R. Wiggington, Sr. not-so-clever reporting of gains, losses, expenses and profits. After all, in 2008 when the credit union began incurring losses, he publicly ordered CFO, Manny Gaitmaitan" to "fix it."
ASSETS
Loans
$111,200,526.26
Less: Allowance for Loan Losses:
$1,100,000.00
Net Loans:
$110,100,526.26
Accounts Receivables:
$2,995,482.45
Cash:
$2,147,203.31
Investments:
$53,560,155.64
Investment in COOP
$40,000.00
Investment in FSCC
$24,000.00
NCUA Deposit
$1,354,277.35
Accrued Income
$840,075.89
Prepaid Expenses
$523,551.39
Assets in Liquidation:
$64,002.33
Other Assets:
$0.00
Sub-total:
$171,649,274.62
Fixed Assets:
$8,977,375.39
Less: Accumulated Depreciation
$5,606,187.52
Net Fixed Assets
$3,371,187.87
Total Assets:
$175,020,462.49
LIABILITY/EQUITY/LIABILITIES
Accounts Payable
-$26,291.32
Notes Payable
$20,000,000.00
Accrued Expenses
$413,119.91
Dividends Payable
$29,393.61
Suspense Accounts:
$0.00
Other Liabilities
$11,638.41
Shares
$138,002,723.91
Total Liabilities:
$158,430,584.52
EQUITY
Regular Reserve
$5,128,606.33
Undivided Income
11,461.271.64
Total Equity
$16,589,877.97
Total Liabilities and Equity
$175,020,462.49
OPERATING INCOME Month to Date
Interest on loans
$588,869.72
Income from Investments
$144,338.00
Fees and Charges
$211,788.90
Miscellaneous Operating Income
$16,299.95
TOTAL OPERATING INCOME:
Month to Date:
$961,296.57
OPERATING EXPENSES- Month to Date:
Employee Salaries/Bonus
$359,889.83
Temporary Personnel
$0.00
Personal time-off
$9426.80
Employee Pension Plan
$8352.77
Workers Compensation Insurance
$4606,81
Employee Medical Insurance
$26,494.42
Medicare Expense-Employer
$4818.75
Social Security Taxes- Employer
$20,604.30
FUTA Expense- Employer
$2308.60
SUI Expense- Employer
$11,555.83
Life/Disability Insurance- Employer
$1741.00
Credit Union League Dues
$2268.67
Membership dues and subscription
$3651.25
Branch lease
$19,287.62
Property Taxes
$2898.37
Janitor Expense
$3603.36
Utility Expense
$4194.17
Building Maintenance
$3023.61
Depreciation-Building
$13,306.53
Security Expenses
$929.75
Printing Expenses
$8211.36
Telephone Expenses
$21,831.74
Postage
$16,051.58
Share Draft Expenses
$2970.72
Equipment Maintenance
$35,206.18
Stationary and Supplies
$$6382.97
Surety Bond Premium & Other Insurance
$13,175.08
Depreciation- Furniture and Equipment
$31,388.15
ATM Expense
$14,085.94
Check Card Expense
$25,711.45
Shared Branching Expense
$4062.89
Technology and Computer Expense
$16,723.28
Miscellaneous Bank Charges
$3634.25
Education Expense- Staff (this is performed in-house & facilitated by the manager of
training)
$3562.20
Education Expense- Senior Management
$2207.40
Education Expense- Supervisory Committee
$0.00
Education Expense- Board of Directors
$0.00
Training Expense
$721.09
Advertising Expenses
$1206.50
Loan Promotions
$8016.09
Promotional Items
$1163.97
Member Research
$0.00
Ambassadors
$273.96
Business Development Expense
$285.00
Collection Expense
$330.09
Real Estate Expense
$0.00
Indirect Dealer Fee
$0.00
VISA expense
$0.00
Credit Investigation Expenses
$4770.08
Lending Center
$2998.00
Lending Expense
$0.00
Legal Expenses
$7156.22
Audit Expenses
$13,500.00
Consultancy Fees
$7050.00
Associated Management Company
(contracted collection agent whose last day of service was 2/27/09)
$17,583.23
Provision for Loan Losses
$58,506.33
Borrower's Insurance
$0.00
Department of Financial Institutions Administration Fees:
$4041.00
Cash Short/Over
$93.74
Interest on Borrowed Money
$60,508.30
Annual Meeting Expenses
0.00
Board of Directors/Supervisors
$1329.82
Annual Retreat
$0.00
ADP Charges
$8419.74
Credit Union Car Expenses
$0.00
Commisary
$219.02
Mileage & Reimbursements
$3407.78
General Expenses
$10,253.97
Courier Services
$6067.99
Storage Expenses
$645.41
Branch Expenses
$0.00
Other losses:
$7771.03
Merger expense:
$0.00
Succession/Strategic Planning
$0.00
Ballot Incident Expense
$0.00
TOTAL OPERATING EXPENSES:
$934,485.99
INCOME LOSS FROM OPERATIONS
$26,810.58
Dividends paid
$144,939.45
Loss/Gain on Disp. of Assets
$0.00
Loss/Gain on Disp of Investment
$0.00
Franchise Tax Board
$0.00
Total Dividends and Other Income
$144.939.45
Net Income (Loss)
-$118,128,87
One has to wonder why a President who boasts that the credit union is experiencing real growth and accruing profit, has to manipulate the credit union's financials? And why would he have to hide the truth if Priority One is in the midst of experiencing real growth? Can you imagine what the future holds for the credit union if President Wiggington's behaviors are allowed to continue?
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8 comments:
I will vouch for Charles Wiggington. He really cares. He cares only for himself. He cares for First Class Travel on airlines for himself. He cares that the Board of Directors Chairperson is kept happy by attending Junkets in Vegas and Hawaii. He cares for top-shelf liquor and gourmet meals. He cares for an unlimited expense account. The man is all about caring.
Wow a loss of $118k for just January!! If Priority One can keep up those monthly losses for 12-months the overall loss for all of 2009 will top $1.4 million.
Is it possible Priority One budgeted for red-ink for 2009? Most credit union's produce a budget which shows a positive bottom line. I suspect Sir Charles will attempt to cut staff, overtime, branch hours and salaries to reverse the red-ink trend. Of course, you can be sure there will be no cutbacks in the CEO's and Board of Director's junket-laden travel and conference budget.
Here's a thought...what will happen to Priority when they have to account for the 51% NCUA write down due to the US Central Corporate bailout? Even without the approximate $650k they will have to pony up for that. it looks like their losses could raise the eyebrows of the DFI and Feds sooner than later. The NCUA assessment/premium could be their final breath.
I understand your point about the NCUA assessment - it's true earnings will be affected by the NCUSIF writedown and Special Premium. But all credit unions will be in the same bucket here. I understand the DFI Examiners are directed to take into account the adverse impact of the assessment when doing exams. In fact, I suspect Sir Charles will use the one-time writedown to his advantage to help explain their negative earnings to the members at the Annual Meeting.
But what about where he's reporting expenses? If he's not reporting them accurately, for whatever purpose, isn't he then violating state and possibly federal law?
Priority One claims to have placed the junket costs in their Education Expense account.
What an intriguing choice of accounts.
Most credit unions have buried ugly expenses like this in the Marketing Expense accounts.
I think the old NCUA Accounting Manual used to call it Member Education and Promotion. It was a forerunner of what we now call Marketing.
Even allowing the creative use of Education, then the obvious and natural conclusions to draw from are either really sloppy and lazy accounting records or a string desire to hide the real information from who should know; people like the members.
Here is a question for John since he seems to know a great deal about Priority One. Does Priority One use an outisde independent certified public accounting firm to conduct the annual audit and issue assurance letters?
Anonymous you nailed it - Wiggington is trying to hide travel and junket data from the members. If I was a member I would demand to know how much was spent at each Vegas and Hawaii conference by the CEO and each attending Board member. The info is especially key when you're posting red ink.
As far as an independent CPA annual audit. I will say that it's almost 100% certain a CPA conducts the audit. I wonder which CPA firm it is?
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