Alloya Profitable for 2011, Is Well Ahead of Plan
Victor A. Vrigian, Jr.
Vice President, Marketing
Alloya Corporate FCU
Warrenville, ILL, February 16, 2012 – Alloya Corporate FCU announced today that it has recorded net income of $9.6 million for the calendar year 2011. After accounting for dividends paid on Perpetual Contributed Capital (PPC), retained earnings (RE) increased to $20.5 million as of December 31, 2011. Regulatory capital (RE plus PCC plus Nonperpetual Capital Accounts (NCA)) was $93.7 million as of December 31, 2011, resulting in a capital ratio of 5.6% and a retained earnings ratio of 1.2% as of that date, based on Moving Daily Average Net Assets of $1.7 billion. The results are unaudited.
“Alloya is executing on a financial plan to earn $3 million over the next twelve months to further bolster retained earnings,” said Todd Adams, Alloya’s Chief Financial Officer. “When compared to the plan presented in the Private Placement Memorandum (for the sale of PPC and NCA), retained earnings are 3 ½ years ahead of the base case scenario targets. The retained earnings ratio of 1.2% easily exceeds the 0.45% required 2 years from now in October 2013, and is even ahead of the 1.00% target required in 2016.”
Alloya’s balance sheet is smaller than might otherwise be expected from a corporate credit union with such a large member base and volume metrics. This is a result of Alloya’s unique business and capital plan based on how credit unions use the corporate’s balance sheet and not the credit unions’ individual asset size. By generally moving members’ overnight funds other than those needed for settlement off the corporate’s balance sheet on a daily basis, Alloya minimizes investment risk for both itself and its members, while at the same time reducing the size of its balance sheet and in turn the capital required to support it.
“Alloya’s flexible capital plan provides significant advantages to our members” said Alloya’s Chief Executive Officer, Charles Furbee. “In this case, besides reducing their capital investment, by working with the Federal Reserve to implement an Excess Balance Account program and implementing it via the corporates’ secure account management portal “Premier View”, the corporate has built an efficient process that helps minimize concentration risk for our members. While each credit union could have made similar arrangements on its own, this process obviates that action. By harnessing the aggregation that the corporate provides in all of its endeavors, Alloya’s members can focus on growing their business and serving their members, not on back office processes that help them do neither.”
About Alloya Corporate FCU
Alloya Corporate Federal Credit Union is a wholesale financial institution – a credit union for credit unions. Alloya is among the largest corporates in the nation with over 1,100 credit union member-owners. Focused on value, Alloya offers a variety of financial and correspondent products and services that leverage the power of aggregation to ensure its members remain competitive in today’s marketplace. Alloya is headquartered in Warrenville, Illinois with major operations in Albany, New York. To learn more, visit www.alloyacorp.org.