The $2.7 billion Catalyst Corporate FCU on Friday released its annual report, which reveals a year in which the recapitalized institution posted nearly $14 million net income, under-budget operating expenses, and a coverage ratio of 88%.

That means 88% of the corporate's expenses were covered by fee income. In comparison, Catalyst reported the corporate industry average is just shy of 70%.

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

The corporate also made progress toward NCUA capital requirements, reporting an increase in its leverage ratio to 7.73% as of 2012 year end, up from 5.34% as of December 31, 2011. That figure exceeds the NCUA's “well capitalized” threshold of 5%. Catalyst also reported a substantial increase in its retained earnings ratio, posting 0.84% at 2012 year end, far higher than the 0.29% it reported in its 2011 financial reports. NCUA regulations require corporates to have retained earnings ratios of at least 0.45% by October of this year.

The reports also reveal details surrounding Catalyst's acquisition 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 Western Corporate 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 NCUA and a contingent liability of $1.55 million, which will be paid over a five year period.

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

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

There were no loans to members or members' share certificates outstanding at FirstCorp when the P&A was completed, and Catalyst did not purchase FirstCorp capital, legacy investments or undivided earnings.

During 2012, Catalyst Corporate increased its total membership to nearly 1,300 capitalizing credit unions, up from approximately 900 members at inception.

Catalyst Corporate now has members in 21 states, mostly in the West and South, indicative of its merger of Western Bridge and the Arizona-based First Corporate, and a merger with Georgia Corporate FCU 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 the Western Bridge acquisition, Catalyst Corporate's April 9 annual meeting was in San Diego, at the Rancho Bernardo Inn.

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

Instant Insights /

Catalyst 2012 Financials Reveal Strong Numbers After Two Acquisitions

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