Having just read Suncoast Schools FCU CEO Tom Dorety's letter tothe editor in the Feb. 3 issue, it makes one wonder how did thelikes of Navy FCU and Pentagon FCU manage to grow capital? It seemsboth did it the old-fashioned way, through retained earnings. Now,one would think with assets north of $5 billion Suncoast Schoolshas reached an economy of scale. You would be wrong.

As CEO of Suncoast, Dorety has not shown a profit since 2007.During 2009 SunCoast has lost over $483 Million in assets. In 2009,SunCoast lost over $77 million in income, and it has lost over $84million in capital. With a net worth ratio of a mere 6.04%, it isin a hard way. Dorety's answer to his plight is to beg permissionfrom the NCUA to raise alternative capital. The real answer is toadjust the Suncoast business model and reduce operatingexpenses.

Glendale Area Schools FCU has the same field of membership asSuncoast. Both credit unions are located in the sand states.Suncoast reports a delinquency ratio exceeding 5.0%. At GASFCU theratio is 1.23%. Suncoast reports a charge-off ratio of 3.15%;GASFCU reports 0.50%. Operating expenses to average assets atSuncoast is 2.59%. At GASFCU it is 1.12%. Suncoast reports anoperating expense to gross income ratio of 40.09%, while at GASFCUit's 26.46%. As a result, Suncoast has a net worth ratio of 6.04%,compared to GASFCU at 8.72%. Suncoast's reported negative income of$76 million in 2008, while GASFCU reported positive income of $3million.