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					Southwest CUNA Management School Understanding Financial Statements

Randy Banks 469 385 6498

Asset Liability Management Financial Statements
This exercise has been developed to help you understand the basic structure of a credit union’s balance sheet and income statement. Understanding this data is important in that this information is a reflection of management’s ability to operate the credit union under certain market conditions. The results of these decisions are reflected on the balance sheet and income statement and measured through key operating ratios. These measurements take into consideration asset and liability mix, investment purchases, pricing loans and deposits, loan quality, capital adequacy, earnings stability, liquity and interest rate risk. An understanding of how this information is presented is important to you in that you can determine the health of the organization, measure your contribution to the success of the credit union’s financial performance and what modifications and/or goals should be forthcoming. The primary goal of a credit union is to serve members and create earnings. Healthy earnings allow the credit union managers to invest in technology, grow the business and pay your salary to name a few of the important outflows of cash. On the next page, you will find a list on financial statement entries that mirror the credit union’s call report. This document includes balance sheet and income statement information. Place these entries on the respective financial statement, in the right order. After you have constructed these financial statements, make sure that they are in balance. These entries are in no particular order. Please use the attached Excel worksheet to complete the exercise. Feel free to solicit help of anyone inside or outside of the credit union. After you have completed this exercise, please fax of email me the results. I will review your submission and respond back by phone. It would be great if you would provide me with a contact phone number. Also included with this exercise is a short list of common acronyms or abbreviations that are frequently used. These acronyms/abbreviations stand for associations, performance measurements and programs that are available to you. Please review the list and write in the names that the abbreviations/acronyms represent. When the list is completed, please send it to me as well. Thanks, Randy Banks Office: 469 385 6498 Cell: 903 450 5892 Email:

Balance Sheet Year End Entries
Balance Sheet

Cash on Deposit at Other Financial Institutions Other Notes, Promissory Notes and Interest Payable Accrued Dividends and Interest Payable Accounts Payable and Other Liabilities Cash on Hand Regular Shares Used vehicle Loans Money Market Shares All Other Unsecured Loans/Lines of Credit Share Drafts Share Certificates Trading Securities, Available for Sale, Held to Maturity Foreclosed and Repossessed Assets NCUA Share Insurance Capitalization Insurance Unsecured Credit Card Loans Other Fixed Assets Other Assets Cash on Deposits at Banks and S&l's IRA/KEOGH New Vehicle Loans All Other Shares Non Member Deposits Cash on Deposit at Other Corporates Undivided Earnings All Other Investments Regular Reserves Land and Building Real Estate Loans Allowance for Loan and Lease Losses Total all Other Loans/Lines of Credit Loans Held for Sale

$6,459,369 $0 $14,786 $123,663 $1,243,212 $15,451,476 $6,344,551 $12,523,881 $2,307,585 $6,934,354 $5,989,885 $947,805 $0 $456,116 $0 $84,662 $276,330 $198,000 $3,828,635 $17,804,883 $739,242 $0 $0 $5,120,313 $10,016,773 $837,583 $0 $4,602,760 -$154,322 $976,094 $0

Income Statement Entries
Income Statement

Trading Profits and Losses Office Operations Expense Dividends on Shares Provision for Loan Loss Loan Servicing Expense Interest on Loans Miscellaneous Operating Expenses Fee Income Interest on Deposits Operating Fees Gain or (Loss) on Investments Gain or (Loss) on Disposition of Fixed Assets (Less) Interest Refunds Employee Compensation and Benefits Professional and Outside Services Interest on Borrowed Money Income from Investments Travel and Conference Expense Other Non Operating Income (Expense) Office Occupancy Expense Other Operating Income Educational and Promotional Expense Member Insurance

$0 $429,629 $839,569 ($20,055) $69,087 $2,081,659 $35,771 $698,407 $0 $10,509 $0 $0 ($184,354) $1,125,609 $205,335 $91 $826,519 $16,635 $0 $103,131 $48,276 $38,200 $0

Credit Union Name Your Name Your Job Title Common Abbreviations and Acronyms Describe these Icons
TCUL _________________________________________________________________

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CAMEL _______________________________________________________________

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