Troubled / Untroubled Banks

[eskercurve]

I realize it's a credit union, but any idea about the health of BECU?

[ira s]

I found something from the end of '08, saying that BECU's 3rd quarter was great despite troubled times, but that didn't seem to last too long:
http://seattle.bizjournals.com/seattle/ ... tory1.html

[eskercurve]

I found it quite easily on the BECU website, searching for "balance sheet". The most recent data posted publicly is from Jan. 09 to Sept. 09. It can be seen here:

http://www.becu.org/livefiles/24/34/Q%2 ... osting.pdf

According to the nine months ending Sept. 09, BECU had a net loss of $45 million, which would make it the second largest in its history. Combined with the $65 million it lost in the prior nine months, I'm thinking that BECU is in a world of hurt. The record foreclosures in the area haven't helped, either.

BECU has roughly $104 million in loan losses increase from the same period in 08. Reserves have fallen by about $70 million and net loans have fallen about $200 million.

I don't know what they term "investments" but they list those as "assets". If you take that as face value (which I don't, their "investments" increased by $200 million after the credit bubble burst in late 07, but I have no other choice), you then get a capitalization ratio (reserves over "assets") then it went from 8% in September of 08 to 7% in 09.

I hardly think that 7% reserves in a fiat money system is "well capitalized", considering their reserves are the only real money they have. However, in all the financial statements they've released, I can't see where they go above 8.4%, even during the credit bubble years.

Anyways, someone with a better understanding of credit unions should speak to these numbers before I say BECU is safe or not.

[Dave0]

"Combined with the $65 million it lost in the prior nine months"

Where do you see that? According to the statement you linked. They had a net positive income of $36 million from 1/1/08 - 9/30/08. I can't find any evidence of a net loss for a quarter before Q4 2008. Considering every bank in the world probably had a net loss in Q4 2008, I'm not too worried.

Yes, a net loss of $43 million for 1/1/08 - 9/30/09 sounds bad, but if you look at all of the statements, it's really only Q4 2008 & Q1 2009 where they were hurting (and who wasn't at that time):

Q4 2008: $29 million net loss (comparing http://www.becu.org/livefiles/24/34/Q%2 ... osting.pdf & http://www.becu.org/livefiles/24/31/New ... osting.pdf)

Q1 2009: $86 million net loss (http://www.becu.org/livefiles/24/32/Q%2 ... sed%29.pdf)

Q2 2009: $29 million net income (negative 57 million minus negative 86 million) (http://www.becu.org/livefiles/24/33/Rev ... 102809.pdf)

Q3 2009: $14 million net income (negative 43 million minus negative 57 million)

On the other hand, I'm a bit skeptical of any privately owned entity when they report their own financials. There is a lot less enforcement of accounting standards for them so I would assume that their financial statements will look a bit rosier than reality.