Article: 09/19/2008
Message from PSECU's President - PSECU Remains Strong
I've written to the membership two times in the past year as the domestic and global financial markets churned. My purpose in writing then and now is to reassure members of PSECU's financial stability.
Over the past two weeks, we've seen amazing changes in the financial markets as some of our country's largest financial firms have stumbled. Fortunately, PSECU is not subject to the problems faced by those other firms. Here are the facts you should know concerning your accounts with PSECU:
- All accounts are federally insured up to $100,000 by the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF is similar to the Federal Deposit Insurance Corporation (FDIC) which insures bank deposits. Both funds are backed by the full faith and credit of the United States government. In addition to the $100,000 coverage, members with IRAs are further insured up to another $250,000. (Learn more about NCUSIF.)
- PSECU's primary asset is loans to our members. The health of that asset is measured by what we call a delinquency ratio. As I wrote in my earlier messages to the membership, our current delinquency ratio stands at 0.61%. That means that 99.39% of our loans are paid on time by members like you. This is the same ratio that I cited when I wrote in March and again in July. In other words, in spite of the turmoil in the outside world, our members continue to pay their accounts to PSECU on time. Thank you for that.
- The money that we don't lend to members is invested in federally insured or federally backed securities. State and federal regulations restrict our investments to these more secure investments.
- PSECU has never participated in subprime lending of any type and our real estate loans to members represent only 19% of our total assets. Our real estate loans are concentrated in Central Pennsylvania, not California or Florida. Central Pennsylvania has not faced the tremendous decline in property values that those other states have experienced.
- PSECU's reserves currently stand at $270 million against assets of $3.2 billion. Those reserves provide a cushion to protect the membership against economic hard times. They are more than adequate for the environment we currently face.
- PSECU's net income through August 2008 is $19.3 million. That's $3.5 million ahead of our net earnings for August 2007. Those earnings will go back into our reserves to make PSECU's foundation even stronger. We post our financial statements on our Web site each month. (View our Financial Statements.)
These are very challenging times but the good news is that PSECU remains strong and ready to help you, our members, with your financial needs.
Sincerely,
Gregory A. Smith
President