RALEIGH, N.C., Nov. 13, 2014 (GLOBE NEWSWIRE) -- State Employees' Credit Union (SECU) recently engaged CliftonLarsonAllen, LLP (CLA), a national accounting and professional services firm, to review the methodologies employed by the Credit Union to determine a bank Liquidity Coverage Ratio (LCR) and the credit union Risk Based Net Worth Ratio (RBNW). CliftonLarsonAllen agreed amounts in SECU's Call Reports and financial statements to LCR and RBNW calculations prepared by management and concurred that the not-for-profit financial cooperative correctly applied the bank and credit union requirements properly in determining its own LCR and RBNW ratios.
The Liquidity Coverage Ratio is a bank industry measurement which assesses the adequacy of short-term liquidity of large banks under runoff stress scenarios over a 30 day period. As noted by Bryan W. Mogensen, CPA, Assurance Principal for CliftonLarsonAllen, "Based on my review the methodology applied by SECU in determining their LCR ratios under base and stressed scenarios is in compliance with the guidance provided by the bank regulators." While SECU is not subject to this measurement convention, benchmarking to standards provided by federal banking regulators is prudent. When measuring its own LCR, SECU ratio's ranged from five to twenty times higher than the minimum bank requirements under the cash runoff stress assumptions.
The current Risk Based Net Worth (RBNW) capital convention of the National Credit Union Administration is undergoing some revisions and is expected to be open for public comment in the near future. The RBNW capital calculation is a part of the quarterly Call Report and is automatically determined from each individual credit union's financial data. The NCUA and the NC Credit Union Division review each quarterly Call Report for accuracy. SECU's Call Report data for a 24-month period was reviewed by CLA to confirm the Credit Union's RBNW. A Risk Based Net Worth of less than 6% is the preferred ratio, and anything over that amount signifies that a credit union has a "complex" balance sheet and may be subject to higher capital requirements. CliftonLarsonAllen's review of the 24-month SECU Call Report data resulted in a consistent RBNW ratio of less than 6%. The review noted that "The methodology employed by SECU for classification and reporting are in compliance with Call Report requirements."
Chief Financial Officer Mike Lord states, "SECU is pleased that CliftonLarsonAllen's review confirmed SECU management findings relative to LCR and RBNW, providing the Credit Union's member-owners with assurance of the positive financial position and strength of their cooperative. SECU's RBNW capital ratio at October, 2014 was 3.98% compared to 3.82% in October, 2013 and 4.86% in October, 2012."
About SECU
A not-for-profit financial cooperative owned by its members, SECU has been providing employees of the State of North Carolina and their families with consumer financial services for 77 years. With more than 1.9 million members, SECU provides services through 254 branch offices, 1,100 ATMs, 24/7 Contact Centers and a website, www.ncsecu.org.