Presented by Dean Rohne CPA CIA dean rohnecliftonlarsonallen

Course Objectives During this session we will discuss the following: • Overview of a Credit Union’s financial statements • The basic financial statements • Review key credit union ratios 2 © 2012 Clifton. Larson. Allen LLP

Definitions and Acronyms • U. S. Generally Accepted Accounting Principles (GAAP) – group of accounting standards that is authoritative accounting for credit unions. • Regulatory Accounting Practices (RAP) – accounting practices prescribed by Federal and state agencies. • Financial Accounting Standards Board (FASB) – primary and most authoritative source for issuance of accounting standards for private companies in the U. S. 3 © 2012 Clifton. Larson. Allen LLP

Introduction • Financial statements are an important management tool. When correctly prepared and properly interpreted they contribute to an understanding of the current financial condition, problems, and opportunities of a credit union. • This explanation has been prepared to help financial and non-financial managers and board members make better use of the information in the financial statements. 4 © 2012 Clifton. Larson. Allen LLP

Required Disclosure • Duties of Financial Officer – Custody of funds, securities, valuable papers and other assets. – Provide full and complete records of all assets and liabilities – Within 20 days of month end provide a financial statement to the board ◊ Must include delinquent loans ◊ Should be posted in a conspicuous place in the office of the credit union – Ensure financial and other reports as required are prepared and sent 5 © 2012 Clifton. Larson. Allen LLP

Types of Financial Statements Specifically, this presentation describes four financial statements: • • 6 The Statement of Financial Condition The Statement on Income The Statement of Cash Flows The Statement of Members’ Equity © 2012 Clifton. Larson. Allen LLP

Types of Financial Statements • These statements are prepared and presented using technical terms and rules that are becoming increasingly complex. Interpretation of these statements may be a formidable challenge to many managers and board members. • We firmly believe that - no matter how technically correct they are - the statements are not useful unless they are actually used in making business decisions. When the statements "gather dust" because managers and board members do not understand what they are saying, we feel an obligation to help. 7 © 2012 Clifton. Larson. Allen LLP

How Do Financial Statements Relate to the Passage of Time? Reporting of Business Activity

Statements The Statement of Financial Condition is a "snapshot" • It represents, at a moment in time, the financial position of the credit union. • It needs to be compared to other "snapshots" to provide meaningful information on changes in financial position. • For that reason, the Statement of Financial Condition from the preceding year is usually provided. 9 © 2012 Clifton. Larson. Allen LLP

Statements The other primary financial statements - present a summary of activities over a period of time, usually a fiscal year • The Statement of Income presents revenues less associated expenses and the resulting net income. • The Statement of Cash Flows provides information about the sources and uses of cash. • The Statement of Members' Equity identifies activity in the members' equity accounts. 10 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Financial Condition • The Statement of Financial Condition is so named because it represents the following equation: • At any point in time this equation holds, although amounts assigned to individual elements will fluctuate. 11 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Financial Condition • Assets increase or decrease as loans and investments are issued and paid off, and as property, equipment and other assets are obtained and used (expensed) in the course of operations. • The valuation of these items, particularly loans and investments, will also increase or decrease assets. The proper valuation amount is often an estimate, and is subject to adjustment upward or downward in later periods. 12 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Financial Condition • Liabilities increase or decrease as obligations are incurred or liquidated and as member deposits are accepted or withdrawn. • Equity increases or decreases primarily as a result of income or loss from operations of the credit union. The equity section of a credit union's Statement of Financial Condition generally consists of undivided earnings, statutory reserves, and other appropriations designated by management or regulatory authorities. 13 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Income • The Statement of Income is a tabulation of revenues and expenses, the latter usually broken down (or summarized) by major categories. 14 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Income • Net interest income is an important measure of the entity's performance, since it represents the income earned (or loss incurred) from the core operations of the credit union, before considering loan losses, fees and charges, and operating expenses. • Achieving an adequate net interest margin is essential for growth in or maintenance of member's equity. • Net interest income is directly affected by the pricing of loans and deposits, and the yields on the investment portfolio. 15 © 2012 Clifton. Larson. Allen LLP

The Statement of Income • The provision for loan losses represents the amount charged to operations for increasing the allowance for loan losses. • The allowance for loan losses reduces the value of loans on the Statement of Financial Condition. • The amount of allowance needed is determined at month or quarter end. • In addition to being increased by the provision for loan losses, the allowance is also increased by loan recoveries and is decreased by loan charge-offs. 16 © 2012 Clifton. Larson. Allen LLP

The Statement of Income • Non-interest income and expense includes gains and losses on sales or disposals or assets, fees and charges paid by members, and the operating expenses of the credit union. • Net income or loss is the all-inclusive "bottom line" that reflects all activity by the credit union or the period being reported on (year, quarter, month, etc. ) 17 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Cash Flows • The Statement of Cash Flows reports the sources and uses of cash for the period, as analyzed into three major classifications: 18 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Cash Flows • Operations include the cash effects of essentially all items identified in the income statement, such as interest received, interest paid, fees received and operating expenses. • Investing activities include the investments in loans and securities, the purchase of property and equipment or the proceeds from the disposition thereof, and also other non-operating assets. • Financing activities include the activity in members' accounts, as well as borrowing and repayment of debt. 19 © 2012 Clifton. Larson. Allen LLP

Overview: The Statement of Members' Equity • The Statement of Members' Equity shows the

Other Elements of Financial Reports • In addition to the basic financial statements, most financial reports which have been reported on by an independent accountant will have a section of Notes to Financial Statements. • If an independent accountant has been associated with the financial statements. a report will be included with the statements. The report will identify what professional service was provided: – Audit – Review – Compilation • It will indicate what conclusions, if any, were reached regarding the financial statements. 21 © 2012 Clifton. Larson. Allen LLP

Other Elements of Financial Reports • In the case of an audit, the independent accountant will provide positive assurances that the financial statements "present fairly" the financial position and results of operations in accordance with generally accepted accounting principles, if it can be concluded that such is the case. • In a review engagement, at best the accountant will express negative assurance -- i. e. , that based on limited procedures no reason was found to doubt that the financial statements were fairly presented. • An accountant conducting a compilation merely assembles the financial statements and offers neither positive nor negative assurances. 22 © 2012 Clifton. Larson. Allen LLP

Other Elements of Financial Reports (cont. ) • The Notes to Financial Statements set forth the major accounting principles used in developing the amounts reported in the statements (where a choice was made from among alternative generally accepted accounting principles or "GAAP"), and also provide additional details about major accounts and transactions. – Examples of the latter include details about investment securities, members' share and savings accounts, loans to members, long- and short-term debt, and contingent liabilities and commitments. • Financial reports may also contain supplementary schedules, which provide more detailed information about major expense captions (such as administrative expenses) or other items appearing in the basic financial statements. 23 © 2012 Clifton. Larson. Allen LLP

The Statement of Financial Condition in Greater Detail • Assets include items of value owned by the credit union. – Cash includes demand deposits in other depository institutions and cash on hand. ◊ Cash on hand for a credit union is primarily made up of a change fund consisting of a supply of currency, coins and cash items (for example, stamps), and a petty-cash fund. The change fund often consists of the tellers' working funds, a reserve fund kept in a vault, and vault funds in transit. – Cash Equivalents are the short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of incurring changes in value because of changes in interest rates. 24 © 2012 Clifton. Larson. Allen LLP

The Statement of Financial Condition in Greater Detail • Assets include items of value owned by the credit union. – Deposits in other financial institutions include certificates of deposit purchased from other financial institutions. These deposits are typically valued at historical cost. – Trading-account securities are the securities that are bought and held for the principal purpose of selling them in the near future. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on the short-term differences in price. 25 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Condition (cont. ) • Assets include items of value owned by the credit union. – Investment securities are made up of a portfolio of many different securities. Credit Unions are regulated by federal and state law restricting the types of investments they are allowed to purchase. Credit union investments include U. S. Treasury bills, notes, and bonds, and obligations and instruments of agencies of the U. S. government. – Mortgage-backed securities represent a participation in an organized pool of mortgages, the principal and interest payments on which are passed from the mortgage originators, through intermediaries (generally quasi-governmental agencies) that pool and repackage them in the form of securities, to investors. 26 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Condition (cont. ) – Both investment and mortgage backed securities are divided into three classifications: ◊ Held-to-maturity ◊ Available-for-sale ◊ Trading 27 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Condition (cont. ) – Classification is dependent on the credit union's intent to hold or sell the security. ◊ Those which will be held until due are put in the hold-to- maturity category and valued at historical cost. ◊ If the credit union may want to sell a security before its stated maturity, the security is put in the available for sale category and valued at market value. The difference between cost and market value is reflected as an increase or decrease in members' equity. ◊ Trading account securities are bought for selling to realize a gain and valued at market value. The differences between cost and market value are reflected as a component of net income. 28 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) – Loans held for sale consist of mortgage loans originated and intended for sale in the secondary market. These loans are stated net of any anticipated losses. – Loans receivable consist of the outstanding loans due to the credit union which usually generate the largest portion of a credit union's revenue and represent the most significant component of its assets. The loans are reduced by the amount of the allowance for loan losses. – Accrued interest receivable is the interest income earned during the period but not yet collected. 29 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) – Other real estate owned includes real estate properties acquired through or in lieu of loan foreclosure. – Property and equipment includes such items as land. buildings, furniture. fixtures and equipment. – NCUSIF deposit is the deposit in the National Credit Union Share Insurance Fund. Maintenance of a deposit of one percent of its insured shares is required by NCUA regulations. 30 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) – Other assets of a Credit Union frequently include such items as accounts receivable, prepaid expenses, and in-transit or suspense items. – Assets for employee benefits could be included as part of other assets or reported separately depending on the size of the investment. 31 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) • Liabilities are made up of legal obligations to repay debts or deposits. – Members' share and savings accounts are the principal source of funds for credit unions. – Borrowed funds is the money borrowed to meet the Credit Unions short-term operational needs. Examples include lines of credit drawn on. mortgages payable, capital lease obligations and notes payable. – Accrued interest payable is the interest that has become during the period but has not yet been paid. 32 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) • Liabilities are made up of legal obligations to repay debts or deposits. – Accrued expenses are other payables which have been withheld or collected but not yet remitted. Examples include such items as payroll taxes withheld and miscellaneous expenses accrued on a monthly basis. – Other liabilities is the caption used for all liabilities not specifically listed elsewhere. 33 © 2012 Clifton. Larson. Allen LLP

Statement of Financial Cond. (cont. ) • Members' equity generally consists only of: – undivided earnings – statutory reserves – other appropriations as designated management or regulatory authorities. by • Credit Unions are required by regulation to maintain a statutory reserve which is not available for the payment of interest or dividends. 34 © 2012 Clifton. Larson. Allen LLP

The Statement of Income in Greater Detail • Interest income is the income earned on the various loans and investments of the Credit Union. • Interest expense is dividends and interest the Credit Union paid out on members' share and savings accounts, certificates of deposit, and on any funds borrowed from other financial institutions. • Provision for loan losses is the expense made in the current period to increase allowance for loan losses; established for loans which may become uncollectible. 35 © 2012 Clifton. Larson. Allen LLP

The Statement of Income in Greater Detail • Non-interest income is income earned from any source other than interest. – Gain on sales of interest-earning assets is the interest earned on the sale of items such as mortgage-backed securities, investment securities and loans receivable. – Unrealized gains on trading account securities is the gain due to the change in the market price of the securities. This gain cannot be realized until the securities are sold. If the market price of the securities falls below the original cost, then this figure would be a loss. – Loan Servicing fees are the fees collected from others for servicing their loans. 36 © 2012 Clifton. Larson. Allen LLP

The Statement of Income in Greater Detail • Non-interest expense includes the expenses for anything other than interest. – General and administrative expenses are for such items as: ◊ compensation ◊ employee pension plan and other benefits ◊ Operations ◊ Occupancy ◊ Share insurance premiums 37 © 2012 Clifton. Larson. Allen LLP

The Statement of Cash Flows in Greater Detail • Operating activities include all transactions and other events that are the result of the Credit Union providing services to its members. – Generally, cash flows from operating activities are the cash effects of transactions that enter into the determination of income. – Cash inflows from operating activities include cash receipts from interest and fees received. – Cash outflows for operating activities include interest paid, cash payments for wages and benefits to employees and cash paid for operations. 38 © 2012 Clifton. Larson. Allen LLP

The Statement of Cash Flows in Greater Detail • Investing activities include the lending of money and collecting on those loans, acquiring and selling securities, and acquiring and selling assets such as land equipment. – Cash inflows from investing activities include the repayment of member loans in excess of loans issued, proceeds from the maturity or sale of investment securities, and proceeds from the sale of property and equipment. – Cash outflows for investing activities include issuance and purchase of loans in excess of loan repayments, purchases of investment securities, and expenditures for property and equipment. 39 © 2012 Clifton. Larson. Allen LLP

Statement of Cash Flows (cont. ) • Financing activities include obtaining resources from members or creditors, and repaying amounts borrowed. – Interest on members’ accounts and borrowings, however, is an operating activity. – Cash inflows from financing activities include the net increase in members' share and savings accounts and new borrowings. – Cash outflows for financing activities include repayment of amounts borrowed and member withdrawals in excess of deposits. • Reconciliation of net income to net cash provided by operating activities does just that, reconciles net income to net cash provided by operating activities. 40 © 2012 Clifton. Larson. Allen LLP

The Statement of Members' Equity in Greater Detail • The Statement of Members' Equity identifies activity in member's equity accounts. This includes posting of net income and appropriation of equity balances, as well as transfers between equity accounts. – Credit Unions are required to keep a certain percentage of earnings in reserve. This is indicated by the transfers from the undivided earnings account to the regular reserve account. – The Unrealized Gain/(Loss) on Investments valuation account is a "contra-equity" account reflecting the adjustment to market values of investments designated as available for sale. 41 © 2012 Clifton. Larson. Allen LLP

Notes to Financial Statements • Although the basic financial statements do present the company's financial position and the results of its operations for the period, there are other important disclosures, both mandatory and voluntary, that cannot be incorporated into the statements per se. • For this reason, most complete sets of financial statements include a section of notes after the basic statements. (These are sometimes still called “footnotes", a holdover term from a simpler era when these disclosures were actually presented at the bottom of the financial statements. ) 42 © 2012 Clifton. Larson. Allen LLP

Notes to Financial Statements • Certain notes are always found in GAAP financial statements. For example, the "summary of significant accounting policies", usually the first note, identifies which among equally acceptable GAAP the organization has elected to use. The notes will always include a greater detail of: 43 © 2012 Clifton. Larson. Allen LLP

Notes to Financial Statements (cont. ) • Other notes will be presented when conditions warrant: – details of debt agreements – capital lease obligations – related-party transactions • Some disclosures appear because the reporting entity believes they provide insight into the organization's economic prospects (e. g. , inflation-adjusted financial data, etc. ). 44 © 2012 Clifton. Larson. Allen LLP

Notes to Financial Statements (cont. ) • Notes are considered an integral part of financial statements. • Standards for accuracy and clarity apply equally to notes. • The independent accountant must apply the same level of service to the notes as to the financial statements themselves. • If well-written and organized, notes help the user to understand the financial statements and the reporting entity's financial and operating prospects. • Because of the substantial amount of detail they contain, notes do require a careful study and a commitment of effort by the reader. 45 © 2012 Clifton. Larson. Allen LLP

Supplementary Information • Financial statements may contain a section of supplementary information. – Usually, this information is additional details, although sometimes it is a re-casting of the basic financial statements on an alternative basis of accounting. – Supplementary information may receive the same level of attention from the independent accountant as the basic statements and notes, or it may not. – In either case, the accountants' report letter(s) will indicate the responsibility they assume. 46 © 2012 Clifton. Larson. Allen LLP

Using Financial Statements to Analyze Performance of the Credit Union • The information contained in basic financial statements (including the notes thereto) can and should be used to provide insight into the financial strength and earnings capacity of the credit union. – This extends beyond such single statement captions as "net income" and necessitates that relationships between accounts be examined. – While an almost unlimited number of such ratios and comparisons are possible, a relatively small group of these are traditionally the object of most attention. 47 © 2012 Clifton. Larson. Allen LLP

Using Financial Statements to Analyze Performance of the Credit Union • The nature of analysis depends on the perspective of the reader. – For example, the short-term note holder or creditor would be primarily concerned with the organization's ability to pay its current obligations. – The member might look to financial stability, competitive loan and savings rates, and ability to fund delivery of additional services. • Credit union management is concerned with many factors and, in addition, needs financial information that is useful on a daily basis. 48 © 2012 Clifton. Larson. Allen LLP

Accounting Estimates • Management is responsible to make the estimate • Auditor is responsible to evaluate the reasonableness of the estimate and the assumptions • Audit risks h Uncertainty h Inherent risk h Uncertainty h Fraud risk h Uncertainty h Auditor skepticism • Internal control may reduce risks 49 © 2012 Clifton. Larson. Allen LLP

CU Significant Accounting Estimates Significant estimates in many credit unions • Allowance for loan losses • Value of other real estate owned • Valuation of investment securities • Loan origination costs and fees 50 © 2012 Clifton. Larson. Allen LLP

CU Significant Accounting Estimates Significant estimates in many credit unions (continued) • Mortgage servicing rights • Market value of investment securities • Post employment benefits • Defined benefit pension plans 51 © 2012 Clifton. Larson. Allen LLP

Accuracy of Financial Statements • Many credit unions have not changed the presentation of their financial statements to comply with NCUA requirements that financial statements should be presented in accordance with GAAP • All credit unions over $10 million in assets and Federally insured must follow GAAP (under $10 million may use regulatory accounting) 52 © 2012 Clifton. Larson. Allen LLP

Accuracy of Financial Statements • Common GAAP vs. RAP differences – GAAP requires listing balance sheet in order of liquidity, RAP will list loans first on the asset side. – GAAP requires member deposits to be listed as a liability, RAP will list member deposits as equity. – GAAP requires the income statement to be presented under the net interest margin method, RAP will list interest (dividends) on member deposits below net income. 53 © 2012 Clifton. Larson. Allen LLP

Audit Adjustments How accurate are your credit union’s financial statements? 1. Does credit union consistently have recorded audit adjustments as part of the credit union’s financial statement audit? 2. Does credit union consistently have passed audit adjustments as part of the credit union’s financial statement audit? Request CPA’s letter to governance in accordance with SAS 114 to disclose to those charged with governance a number of items including: – – – 54 audit adjustments made passed adjustments changes in accounting principles © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Liquidity Ratios Liquidity ratios measure the credit union’s ability to meet current demands for funds. 1. Loans-to-Shares Ratio This ratio measures the degree to which members' savings are funding loans to members. A high ratio can signal liquidity problems if the credit union faces high delinquency levels, heavy savings withdrawals or high loan demand. 2. Loans-to-Asset Ratio This ratio shows the degree to which the credit union is providing its most important service - loans. A high ratio indicates less liquidity while a low ratio represents more. 55 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Liquidity Ratios Liquidity ratios measure the credit union’s ability to meet current demands for funds. 3. Long-Term Assets to Total Assets Long-term assets include real estate and other loans with extended maturities, fixed assets, and long-term investments. A higher ratio of long-term assets to total assets is an indicator of less liquidity 56 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Earnings Ratios • Earnings are the primary performance gauge for a credit union. Spread analysis is the main method of measuring earnings. • The object of spread analysis is to determine the credit union's net spread for a time period. • Net spread is the difference between what is earned on loans and investments and what is paid for funds after expenses have been covered. 57 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Earnings Ratios 1. Spread Analysis A. Yield on Assets The average total assets are calculated by adding the total assets at the beginning of the time period to total assets at the end of the time period and dividing the sum by two B. Cost of Funds C. Margin or Spread 58 Yield on assets – Cost of funds (A-B) © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Earnings Ratios 1. Spread Analysis D. Provision for Loan Losses E. Net Operating Costs F. Net Income Margin – Net operating costs and loan loss provision [C-(D+E)] 59 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Earnings Ratios (cont. ) 2. Rate of Return on Loans to Members • Since credit unions earn most of their income from loans. it is critical to know the return on loans. – If the percentage is less than the credit union's nominal lending rate, it is likely that there has been a significant change in market rates, that there is substantial loan delinquency, or that interest is not being calculated accurately. – Average loans outstanding are calculated by taking the amount of loans outstanding at the beginning of the time period, adding them to the total for the end of the period, and dividing by two. 60 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Earnings Ratios (cont. ) 3. Operating Expense-to Assets Ratio • This ratio gives some indication of the organization's efficiency. As the credit union grows, this ratio should decrease. If the ratio does not meet the budgeted goals, it's likely that expenses were excessive. 61 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Capital Adequacy Ratios Capital adequacy ratios are used to evaluate the credit union's capital position and ability to withstand potential losses. 1. Gross Capital Ratio • This ratio shows total capital strength relative to total assets. It indicates the amount of financial cushion available to meet unexpected losses, fund new services, or finance fixed assets. 62 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Capital Adequacy Ratios Capital adequacy ratios are used to evaluate the credit union's capital position and ability to withstand potential losses. 2. Net Capital Ratio • This ratio indicates the amount of financial cushion available to the credit union to meet unexpected losses and fund new sources. 63 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Capital Adequacy Ratios Capital adequacy ratios are used to evaluate the credit union's capital position and ability to withstand potential losses. 3. Delinquent Loans to Capital Ratio • This ratio measures the relationship of delinquent loans to capital. A small or declining ratio is a positive indicator. 64 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Asset Quality Ratios For many credit unions, loans to members are the main asset, and loan delinquency is the gravest danger credit unions face. For this reason, determining the strength or quality of assets is a critical financial measurement. By calculating asset quality ratios, a credit union can determine the amount of risk it faces. 1. Delinquency Ratio • This shows the proportion of total loans outstanding that are delinquent and may become losses. The delinquency ratio is a key indicator of financial health of the credit union, as well as a predictor of loan repayment. 65 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Asset Quality Ratios 2. Loan Write-off Ratio • A high ratio in this area may reflect a troubled economy or it could mean poor lending and/or collection practices. 66 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Growth Ratios Growth ratios measure changes in savings, loans, net income, expenses, assets, liabilities, equity, membership or other indicators. These ratios help determine whether the credit union is growing as planned. These ratios also indicate if growth is adequate in comparison to membership potential. 1. Annual Membership Growth Ratio • This ratio measures the credit union's growth from the previous year. 67 © 2012 Clifton. Larson. Allen LLP

Common Financial Ratios Growth Ratios 2. Annual Savings Growth Ratio • This is the growth in shares and savings during the past 12 months. • Annual growth rates in assets, loans, investments, equity, expenses and net income can all be calculated using a method similar to that for annual member or deposit growth. 68 © 2012 Clifton. Larson. Allen LLP

Summary • Financial analysis involves many different approaches; the ratio analysis presented on the preceding pages is only one of several means of gaining an understanding about a credit union from the financial data. • Other approaches; such as the careful study of the financial statement notes and the examination of the credit union's accounting policies, should be considered. 69 © 2012 Clifton. Larson. Allen LLP

Contact Us 70 Dean Rohne, CPA, CIA 109 N Main St. PO Box 219 Austin, MN 55912 800/657 -4477 Follow our blog for current discussions on health care. www. larsonallen. com/blog dean. rohne@cliftonlarsonallen. com www. linkedin. com/companies/ larsonallen www. twitter. com/larsonallenhc www. facebook. com/larsonallen © 2012 Clifton. Larson. Allen LLP