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A message from Penfed
Old 07-25-2008, 09:49 AM   #1
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A message from Penfed

I remember a couple of people asking about Penfeds solidity compared to other banks and CU's. Got an email from their chairman today, thought I'd share.

"No doubt youíve seen and read about the many problems currently plaguing much of the financial services industry. Iíve received more than a few e-mails from members who are concerned about where Pentagon Federal stands in todayís environment. Iím happy to report that, unlike many of the financial institutions in the news recently, your credit union does not hold any collateralized mortgage obligations (CMOs), nor do we have any subprime mortgages in our portfolio. It's important to point out that recent bank, thrift, and mortgage company troubles all involve a history of subprime lending.

At Pentagon Federal, we take great pride in the fact that our history of prudent lending standards has kept us out of the subprime fray. Our loss rates are half those of our peers in the credit union industry and a tiny fraction of those in the financial services industry as a whole. In addition, our mortgage portfolio is excellent and we are monitored by federal government regulators.

Simply put, we have none of those huge losses youíve been reading about to pass on to our members. Other financial institutions may experience difficulties, but our careful lending practices have kept us clear of the kinds of risks that have landed some banks in crisis. Because of our lending standards and careful internal financial controls, today's economic troubles are likely to have a negligible impact on the rates you pay on Pentagon Federal loans or the yields you receive on our savings/share products.

Additionally, your Pentagon Federal deposits are insured to at least $100,000 -- backed by the full faith and credit of the United States government. Both traditional and Roth Individual Retirement Accounts (IRAs) are similarly insured to at least $250,000.

We realize some of our members may be suffering through these troubled economic times. Hard times usually mean job losses and other cutbacks that certainly affect at least some Pentagon Federal Credit Union members. Despite a national trend toward higher loan delinquencies and losses, rest assured that Pentagon Federal remains an industry standout for low delinquencies and losses.

And despite all you've heard about hard times for mortgage lenders, Pentagon Federal continues to have a very strong mortgage business. We have plenty of mortgages to choose from. In fact, our 5/5 ARM is one of the best mortgage deals out there for homeowners who may be facing dramatic increases as their current ARMs' adjustment periods end. Our products are actually helping our members stave off the effects of rising rates and a down mortgage market.

If you have more specific questions about Pentagon Federal Credit Unionís financial well-being, please visit the "About Us" section of PenFed.org under "Publications," you can find copies of our last seven Annual Reports, which detail what the credit union has been doing to ensure its profitability and continued financial excellence for our membership as well as detailed financial analyses of the credit unionís deposits and loans.

We appreciate the trust you place in Pentagon Federal Credit Union. Itís loyal members like you who have allowed us to remain one of the strongest and safest credit unions in the world. We look forward to serving you in the future with the same sound practices that you have come to expect from us."
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Old 07-25-2008, 09:54 AM   #2
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Having looked at Pen Fed's financial statements numerous times, I have zero doubt that they are quite solid. I have only one problem with them: I wish they could go public so I could buy shares as a depositor!
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Old 07-25-2008, 10:04 AM   #3
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Originally Posted by brewer12345 View Post
Having looked at Pen Fed's financial statements numerous times, I have zero doubt that they are quite solid. I have only one problem with them: I wish they could go public so I could buy shares as a depositor!
If they had "pesky" shareholders they would be so motivated by greed they would start doing stupid things to make money..........
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Old 07-25-2008, 10:10 AM   #4
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If they had "pesky" shareholders they would be so motivated by greed they would start doing stupid things to make money..........
So true then they would become like all the banks we left.
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Old 07-25-2008, 10:17 AM   #5
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Another point is that a LOT of their work is with Active Duty Military. Logically, a short letter to the Commander of a trooper or trooperete (that ought to bring the flames) falling behind in payments will probably result in a quick positive adjustment to their payment history. I am sure NFCU has the same motivating factor at work. USAA also but probably to a lesser extent.
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Old 07-25-2008, 10:21 AM   #6
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If they had "pesky" shareholders they would be so motivated by greed they would start doing stupid things to make money..........
Not necessarily true. For example, look at a bank like HCBK. They never wavered from their insistence on sound lending standards and a conservatively run balance sheet. And they went public ten odd years ago.
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Old 07-25-2008, 10:30 AM   #7
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trooper or trooperete (that ought to bring the flames)
Because trooper is gender neutral and if you were trying to differentiate then it should be trooperette?
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Old 07-25-2008, 10:35 AM   #8
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If they had "pesky" shareholders they would be so motivated by greed they would start doing stupid things to make money..........
Good point. When you don't have to hit numbers quarter after quarter to satisfy Wall Street, it's easier to manage a business with a long-term perspective -- at least for large businesses with lots of anal-yst coverage.
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Old 07-25-2008, 10:37 AM   #9
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I got the same letter - it must be a pretty exclusive club we belong to.

I know they are fairly conservative on loan underwriting. They turned me down on a home equity loan application when I was applying for only about 60% LTV. I reapplied and got approved after showing them my personal balance sheet with enough assets to repay the loan 3 times over, and verification of income to pay the monthly payments 10x over.
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Old 07-25-2008, 11:19 AM   #10
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"nor do we have any subprime mortgages in our portfolio". Ha! Penfed loaned me money on our home - they only think they don't have any subprime mortgages!
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Old 07-25-2008, 11:21 AM   #11
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My CU has a similar note on their web site. And also prominently notes that they have never underwritten any subprime mortgages.
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Old 07-25-2008, 11:27 AM   #12
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I got the same letter - it must be a pretty exclusive club we belong to.
I figured all members that signed up with an email address got it. But a lot of people who arent members yet were asking about the financial stability of the CU before buying a CD or opening an account there.

This seemed to answer those questions.
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Old 07-25-2008, 12:22 PM   #13
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Got the same letter. Go public! That way we can ride it up for a couple of years followed by the shareholders burning the company to the ground. It would make a great movie methinks.
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Old 07-25-2008, 12:35 PM   #14
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Originally Posted by cute fuzzy bunny View Post
I figured all members that signed up with an email address got it. But a lot of people who arent members yet were asking about the financial stability of the CU before buying a CD or opening an account there.

This seemed to answer those questions.
Sorry - I forgot the "this is sarcasm" (in thick heavy polish accent) tag.
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Old 07-25-2008, 12:36 PM   #15
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... a trooper or trooperete (that ought to bring the flames)
Didn't the Jurassic dinosaurs perish in a sea of flame too?

Anyway it's a rank, not a biological gender description. Heck, my spouse has a piece of paper declaring her to be an officer and a gentleman by an act of Congress.
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Old 07-25-2008, 01:52 PM   #16
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I like this board. It even tells you when you misspell a word "trooperate" verses "trooperatte", wrong context "gender" versus "non-gender.

Just remember all will become "dinosaurs"; it is just some of us are way ahead of the class.
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Old 07-25-2008, 06:09 PM   #17
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Sorry - I forgot the "this is sarcasm" (in thick heavy polish accent) tag.
I usually do.
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Old 07-25-2008, 06:23 PM   #18
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I like this board. It even tells you when you misspell a word "trooperate" verses "trooperatte", wrong context "gender" versus "non-gender.
I didn't tell, I asked. I have no idea why one would get flamed so I was taking a couple shots in the dark.
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Old 07-25-2008, 06:24 PM   #19
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So Marquette, is your wife known as Marquetteette?

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Old 07-25-2008, 06:26 PM   #20
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So Marquette, is your wife known as Marquetteette?

Around the house she's known as "woman, go get me another beer"

Outside the house... well, who are we kidding, she's not allowed outside the house.
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