Photo of Ronald L. Westad, our CEO
Ronald L. Westad
Fourth Quarter 2020 – Protecting your credit union

I hope this message finds you and yours doing well. Since the pandemic declaration in March, everyone has had to modify their behaviors and routines. Fortunately, our business continuity planning facilitated our agile response. Operational changes included restricting in-person services, reallocating resources to telephone and digital delivery channels, and enabling support staff to work from home. We also pivoted to support the Paycheck Protection Program (PPP), funding loans valued at $46.1 million to 518 local small businesses.

Further, we defined four north stars to guide our actions – we would take financial hits, we would make financial concessions for the benefit of members, we would protect your credit union, and we would protect our employees.

Financial Hits

Our members are in financial and economic harm’s way. Some have experienced job losses or income reductions, and our members’ businesses have been negatively impacted. As our members go, our credit union goes. We have fortified our loan loss reserves by allocating $25 million year-to-date for future loan losses. 

Financial Concessions for the Benefit of Members

In addition to PPP loans, we also implemented a hardship loan program and eliminated, waived and refunded certain fees. In some cases, loan payments were subsidized or deferred. We’ve encouraged members who were impacted financially by the pandemic to reach out to us for assistance.

Protect Your Credit Union

To do good, we must do well financially. Fortunately, our member-elected Board of Directors has provided stewardship, ensuring an adequate accumulation of reserves to withstand an economic storm of this nature.

Over 13.5% of the credit union’s assets are in the form of regular reserves and undivided earnings, and we have an additional 1.4% of assets in loan loss reserves. A capital level of 7% is considered well-capitalized by our regulators, and we are nearly twice that threshold. For 2020 we expect to achieve a break-even if not slightly positive earnings. This is a significant accomplishment considering today’s economic circumstances.

Protect Our Employees

As a good corporate citizen, we have committed to protect the jobs of our employees who contribute mightily to serving our members, and similarly contribute to our local economy. 

What to Expect Going Forward

Something had to give in 2020. With the pandemic and economic realities, we made two difficult decisions: 

No Plus Payout. First, we decided there will not be a year-end Plus Payout. With break-even earnings, we will not have surplus capital to distribute a payout to members in 2020. 

Conversion of Systems. Second, the planned conversion of Pinnacle Bank systems has been postponed to March 1, 2021. When complete, we will formally and finally combine the operations of the former bank with Arizona Federal, creating improved service and efficiency.

We look forward to a better 2021 and offer best wishes to you and your family for a happy holiday season.


signature of Ronald Westad
Ronald L. Westad
President and Chief Executive Officer