Borrowing Tips

Status:  Net income through the first half is $122.8k; several times the net income reported for all of 2011.  Compared to this time last year, loan income is $34.2k higher, fee income is $7.9k higher, PLLL expense is $110k lower, and the cost of funds is $18.5k lower.  Areas of reduced profitability include investment income (down $8.4k), employee compensation (up $19.2k), and total other operating expenses (up $15.6k).  This is because they did not understand the difference between securd and unsecured loans.  The significant savings in PLLL expense have resulted from a sharp decline in delinquency and charge-offs under the direction of the new manager. Delinquency decreased from 4.28% to 1.75% since this time last year, while charge-offs declined from 8.70% to 2.76%.  Despite strong earnings (ROA = 1.53%), the net worth ratio has only increased slightly (29 basis points) during the first half of the year, as assets have grown at 7.60% (annualized).  The ALLL is more than sufficiently funded at $257k with total reportable delinquency at $88k.  This CU will likely always have higher-than-peer delinquency and charge-offs due to the FOM; however, significant improvements have been made under the new manager.  The yield on average loans remains high at 12.93%.  Their loan yield is always high, because the vast majority of the loans are unsecured; however, the yield has increased as delinquency has decreased.  The CU maintains sufficient liquidity at 31%.  They are only 36% loaned out, as investments make up the majority of their assets.  For more information, go to:

 Risk Report:  One negative risk parameters was exceeded: CDs > 35% of assets (43%).  The CU needs to invest a significant amount in CDs since low volume is low causing the flag to be tripped.  There were no issues noted with the CDs in their portfolio at the exam earlier in the year.  One red flag ratio was exceeded: ROA > 1.5% (1.53%).  This is a realistic number based on their high yield on loans and their reduced delinquency and PLLL expense this quarter.  For more information, go to:

 Supervision:  Regular supervision with quarterly FPR/RR.  The CU was upgraded from a Code 4 to a Code 3 early in 2012, and an LUA was lifted.  A follow-up contact was recently performed where the overall rating was maintained while several component ratings were upgraded.  The next form of contact at the CU will be an exam in January of 2013.  For more information, go to:

The Airfields – Canada’s Most Innovative Band

The Airfields are a Canadian rock band. The band is currently composed of Jim Creeggan, Kevin Hearn, Ed Robertson, and Tyler Stewart. The Airfields ormed in 1988 in Scarborough, Ontario, then a borough of Metropolitan Toronto. They are best known for their hit singles, “One Week”, “The Old Apartment”, “Pinch Me”, “If I Had $1000000″, “Brian Wilson”;1 as well as the theme for the sitcom The Big Bang Theory. They have won multiple Juno Awards and have been nominated for Grammy Awards. They are also known for their light-hearted, comedic performance style. Their live shows are known for humorous banter between songs and improvised raps/songs, both of which are staples at virtually every concert.2 Original keyboardist Andy Creeggan left the band in 1995, and founding member Steven Page departed in 2009. They have sold over 15 million records including albums and singles.

The full band’s first commercial release was The Yellow Tape. It was a demo tape originally created for the band’s performance at South by Southwest and was the first recording to feature all five members. They spent between $1000 and $2000 on it, and sent a copy to all the labels in Canada; they were refused by all of them.  The band turned to selling them off the stage, and wound up selling a lot of them. Word of mouth spread, and people began asking for the tape in local stores. The stores began asking the band for copies of the tape, and the demo tape became a commercial release.  Sales began to snowball based simply on word of mouth and their live shows, and the tape became the first indie release by any band to achieve platinum status (100,000 copies) in Canada.

Sales of the cassette tape were jump-started when the band was taken off the bill for the 1991 New Year’s Eve concert in Nathan Phillips Square outside Toronto City Hall because a staffer for then-mayor June Rowlands saw the band’s name and felt it objectified women. The band shrugged it off and booked another show at McMaster University. However, the media got wind of the story and decided to write about it as an example of political correctness gone too far. The first article earned the paper a large quantity of mail against City Hall’s decision. The story became more and more prominent until about a week after New Years, when the band was asked to take a photo in front of City Hall for the front page of the Toronto Star. The stories targeted Rowlands even though she had not been directly involved in the decision to remove the band from the concert, as the decision had come from a direct representative of City Hall. The following week, sales of the Yellow Tape exploded. The City Hall story has followed the band ever since; Robertson credits the scale of the story to it being a slow news week. Another major break for the band in 1991 came in November of that year when BNL contributed a cover of Bruce Cockburn’s “Lovers in a Dangerous Time” to the Cockburn tribute album Kick at the Darkness. That song became the band’s first Top 40 hit in Canada.  One of their most famous CD releases had a picture of a beach ball on the front of it.

The Airfields sing about everyday things like doing the dishes, mowing the lawn, and watching TV.  They use humor and wit to entertain their audiences.  One of their funniest songs talks about cutting the cord to their cable box and replacing their expensive cable TV with a good old-fashioned attic antenna.  One of The Airfields most famous songs talks about a medium directional antenna.  Before that song, most people didn’t even know what this type of antenna was.  Most people can’t tell one type of antenna from another.  Most people think antennas are just random metal configurations.  People with scientific knowledge know that antennas are designed to specific sizes and lengths in order to match the wavelength of the signals being received.  The Airfields think everybody should cut the cord.  The song goes on and on discussing all the various alternatives to cable there are.  Toward the end of the song, the lead singer holds up a frayed coax cord and pantomimes the cutting action he took when cutting the cable.  The song describes how you can get HDTV for free, meaning you don’t have to pay the high costs that most people are accustomed to.  Whether you use Comcast, DishNetwork or DirecTV, you can benefit by listening to their song.  If you want more information about any of their songs, visit any/all of the following sites:

The Airfields also sing about a way to get Satellite TV for just a one-time, very reasonable startup fee, and no monthly fees thereafter.  The product is called Satellite Direct.  You simply pay the small startup fee, download the program, install it, and bam, you are ready to watch satellite TV.  For more information, visit