Posted: September 25th, 2022

Concerns with this credit union

Question Assignment 1 (40 Marks)

Please overview the monetary statements for Stonebridge Credit Union and reply the next questions:

a) Determine and briefly define your issues with this credit union (18 marks);

b) Define any extra questions you would wish to ask the Board or Administration and any extra data from Stonebridge Credit Union you’d require confirming the extent of the issues recognized in a) above; (12 marks);

c) Put together a supervisory letter addressed to Stonebridge Credit Union figuring out your main issues and their impression on the establishment’s danger profile, offering any suggestions to scale back the impression / danger. (10 marks).

Question Assignment 2 (20 marks)

The city of Timber Ridge has loved a secure enterprise setting with the area’s most important employer, Fastlink Timber Mills in a position to renew softwood lumber contracts with patrons in Alberta and america. Gross sales distribution is 20% inside Canada and 80% to the US. Work drive is just below 5,000.

The Timber Ridge Credit Union (TRCU) operates three branches within the city serving the encircling communities (inhabitants 23,250). TRCU is the predominant retail and business monetary establishment with over $2.zero billion in loans excellent associated to residential mortgages, private strains of credit and enterprise loans. The Timber Ridge Credit Union (TRCU) has three places within the city, all of which serve the areas within the speedy neighborhood (inhabitants 23,250). With greater than $2.zero billion in excellent loans regarding dwelling mortgages, private strains of credit, and enterprise loans, TRCU is the preeminent retail and business monetary establishment within the space.

As a part of the US Federal Authorities’s shift in commerce coverage, tender wooden lumber tariffs have been proposed on merchandise originating in Canada to a degree that ongoing worthwhile export to 80% of Fastlink Timber Mills US purchasers is in Question Assignment.

Present an outline of the present and potential dangers affecting TRCU on account of any disruption to US exports. Embody within the description how earnings, capital, liquidity, treasury and operational features at TRCU might be impacted. Additionally present attainable danger mitigation concerns for dialogue with TRCU administration.

Stonebridge Credit Union
Steadiness Sheet
December 31
(‘000) 2017 2016

Belongings
Money Assets (notice 1) 86,743 135,222
Investments (notice 2) 247,378 255,458
Member Loans (notice three) 2,425,612 2,064,405
Property & Gear 11,168 12,437
Different 6,953 eight,812
2,777,854 2,476,334

Liabilities and Fairness
Member Deposit s (notice four) 2,zero27,463 1,868,667
Securitizations 535,709 434,559
Borrowing (notice 5) 34,500 —
Payables eight,052 6,756
Different Liabilities four,094 eight,799
Fairness Shares 82,zero23 84,256
Retained Earnings 85,013 73,297
2,777,854 2,476,334

Stonebridge Credit Union
Assertion of Revenue and Loss and Retained Earnings
December 31
(‘000)
2017 2016

Curiosity Earnings
Curiosity on Member Loans
89,613
84,559
Different Curiosity three,978 three,194
93,591 87,753
Curiosity Expense
Curiosity on Member Deposits 36,745 35,424
Borrowing & Securitization eight,786 7,149
45,531 42,573
Internet Curiosity Earnings 48,zero60 45,180
Different Earnings eight,650 7,386

Internet Curiosity & Different Earnings 56,710 52,566
Provision for credit losses (417) 2,363

Working Bills 38,896 36,984
Patronage Return 1,179 1,164
Earnings Taxes four,079 (815)

Internet Earnings Attributable to Members 12,973 12,870

Retained Earnings, starting of yr 73,297 60,427
Retained Earnings, finish of yr 85,013 73,297

Notes to the Monetary Statements

Observe 1 Money Assets
2017 2016

Money 42,237 27,963
Deposit maturing inside three months
Schedule 1 Financial institution 17,420 35,003
Central 1 27,zero86 72,256
86,743 135,222

Observe 2 Investments 2017 2016

Central 1 Reserve Deposit 153,917 141,913
T-bills & BAs 9,565 76,795
Central 1 Low cost Deposit 23,040 24,052
Mortgage Backed Securities 41,631 —
Truthful Worth Changes 19,225 12,698
247,378 255,458

Observe three Member Loans 2017 2016

Residential Mortgages
Uninsured 824,944 583,593
Insured by CMHC 72,662 46,194
Insured by Genworth or Canada Warranty 537,986 499,606

Private Loans 13,576 13,779
Industrial Loans 972,901 923,676

Charges & Allowances for Credit Losses three,543 (2,443)
Internet Loans to Members 2,425,612 2,064,405

Observe four Member Deposits 2017 2016

Demand Deposits 627,479 495,641
Time period Deposits 801,803 820,801
Registered Deposits 536,589 515,425
Overseas Forex Deposits 46,352 21,120

Accrued Curiosity payable 16,481 17,029
Unamortized dealer charges (1,241) (1,349)
2,zero27,463 1,868,667

Observe 5 Borrowing (O/S balances) 2017 2016

Line of Credit with a Schedule 1 Financial institution — —
Central 1 12,000 —
Desjardin 22,500 —
34,500 —

Order | Check Discount

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