PLANO, Texas (3/6/12)--The number of credit unions that have capitalized Catalyst Corporate FCU in Plano, Texas, six months after its inception has grown to more than 1,000.
Catalyst Corporate passed that mark last week as several credit unions continued submitting paperwork to authorize capital contributions. The corporate credit union ended the week with 1,012 members that collectively provided more than $114 million in capital funding.
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"The 1,000-credit union mark is mostly significant inasmuch as it indicates that Catalyst's low capitalization levels and breadth of cooperative-priced services appeals to credit unions," said Kathy Garner, the new president/CEO of Catalyst Corporate.
More than 100 of the newest Catalyst members are recent converts from Western Bridge Corporate FCU in San Dimas, Calif., Garner said. "While credit unions from all parts of the country have joined Catalyst Corporate, there has been a surge of Western Bridge members making the transition," she said.
"Catalyst executives recently had the chance to meet hundreds of credit union officials from Western Bridge credit unions during our recent series of 20 town hall meetings," Garner added.
The meetings were a follow-up to the National Credit Union Administration (NCUA) December announcement that Catalyst Corporate was selected to acquire the operations of Western Bridge Corporate. NCUA's decision put into motion a plan that provided a non-disruptive, low-cost transition for Western Bridge member credit unions, Gamer added.
"One of the key points that we share with attendees is the way in which the model allows the corporate to maintain a low-risk balance sheet while building retained earnings sufficient to meet future regulatory requirements," Garner said. "Catalyst Corporate's efficiency will ensure that the corporate will thrive financially, meet all of the capital and retained earnings objectives, and continue to be innovative in the delivery of services."
Catalyst Corporate already is exceeding many of the financial measures such as the coverage ratio--the key measure of efficiency--in its business plan, Garner said.
"Our coverage ratio expectation was high--an 87% estimate used in our business plan, compared with an industry average of about 55%," she added. Catalyst achieved 94.1% for the September-December 2011 period.
Catalyst's model is designed to be less dependent on member contributed capital over time, as a result of strong growth in retained earnings, Garner explained. Catalyst's membership capital requirement is a one-time occurrence with no future adjustments, she said.