The $2.7 billion Catalyst Corporate FCU on Friday released itsannual report, which reveals a year in which the recapitalizedinstitution posted nearly $14 million net income, under-budgetoperating expenses, and a coverage ratio of 88%.

That means 88% of the corporate's expenses were covered by feeincome. In comparison, Catalyst reported the corporate industryaverage is just shy of 70%.

The coverage ratio reduces Catalyst's reliance on investmentincome, said President/CEO Kathy Garner in a release.

The corporate also made progress toward NCUA capitalrequirements, reporting an increase in its leverage ratio to 7.73%as of 2012 year end, up from 5.34% as of December 31, 2011. Thatfigure exceeds the NCUA's “well capitalized” threshold of 5%.Catalyst also reported a substantial increase in its retainedearnings ratio, posting 0.84% at 2012 year end, far higher than the0.29% it reported in its 2011 financial reports. NCUA regulationsrequire corporates to have retained earnings ratios of at least0.45% by October of this year.

The reports also reveal details surrounding Catalyst'sacquisition of two corporates, Western Bridge and First Corporate,which the Plano, Texas-based Catalyst completed in 2012.

Regarding Western Bridge, the remnants of the failed WesternCorporate FCU of San Dimas, Calif., Catalyst recorded goodwill of$2.14 million effective July 1, the acquisition's effective date.That figure includes an initial $2.47 million payment to the NCUAand a contingent liability of $1.55 million, which will be paidover a five year period.

According to the annual report, that figure is “based on thecapitalization level and related fee income of original WesternBridge members.”

Catalyst also reported a bargain gain of $52,000, which wasrecognized related to the FirstCorp purchase and assumption, whichwas effective Oct.29.

There were no loans to members or members' share certificatesoutstanding at FirstCorp when the P&A was completed, andCatalyst did not purchase FirstCorp capital, legacy investments orundivided earnings.

During 2012, Catalyst Corporate increased its total membershipto nearly 1,300 capitalizing credit unions, up from approximately900 members at inception.

Catalyst Corporate now has members in 21 states, mostly in theWest and South, indicative of its merger of Western Bridge and theArizona-based First Corporate, and a merger with Georgia CorporateFCU in 2011.

The annual report also revealed that 664 member credit unions,some 53%, have fewer than $25 million in assets.

In a nod to its California-based members picked up in theWestern Bridge acquisition, Catalyst Corporate's April 9 annualmeeting was in San Diego, at the Rancho Bernardo Inn.

Members elected to three-year terms include Bill Before, CFO ofthe $1.7 billion Spokane Teachers Credit Union of Liberty Lake,Wash.; Syed Dinar, CFO of the $289 million Texas Bay Area CreditUnion of Houston; Lin Hodges, president/CEO of the $1.3 billionAssociated Credit Union of Norcross, Ga.; and John Papagno, CFO ofthe $126 million Alive Credit Union of Jacksonville, Fla. Electedto a one-year term was Trevor Tokishi, executive vice president ofthe $102 million Valley Isle Community Federal Credit Union ofKahului, Hawaii.