After Callahan retired from Patelco in 2002, the credit union continued to thrive and even negotiated not one but two purchase and assumptions with the NCUA in 2008. Waite said the credit union was in the market for just one P&A but coincidentally landed both the Sterlent and Cal State 9 deals on the same day, which magnified the challenge to integrate the three organizations.

Patelco's financial position has always centered on strong core earnings, Waite said, which became even more important in 2008 as the economy turned south and credit losses started to increase.

“We had positioned ourselves strategically for a merger opportunity and financially by increasing our net interest margin and noninterest income,” he said. Further, Patelco's executive team valued both P&A operations and established an expected return on their investment.

Regulators felt the credit union was financially strong enough to absorb both Sterlent and Cal State 9, and the deal was struck.

Waite handled the acquisition integration, ensuring uninterrupted service to members and the quick elimination of redundancies and costs, which allowed both merged credit unions to turn a profit by 2009.

“Of course, we did not purchase all of the nonperforming loans and acquired far more deposits than earning assets,” he said. “So we were expense heavy coming out of the deal, which placed a greater emphasis on revenue generation. We do still have a large amount of goodwill on the books but have not taken any impairment losses on it to date.”

In fact, Waite acknowledged that credit unions will continue to consolidate in 2010 and said Patelco “would take a serious look” at another troubled credit union if regulators come knocking.

“We learned a lot during the last two and have experience at saving failing institutions. While I cannot speak for our CEO or board, personally I think a merging with a healthy credit union makes more sense,” he said.

Other balance sheet strategic achievements at Patelco include Waite's ability to manage interest rate risk “during some of the most dramatic shifts in interest rates in history” and a $29 million unrealized gain on his mortgage-backed securities portfolio in fourth-quarter 2009, some of which the credit union cashed in on.

“Not bad, I'd say, for a collection of the right mortgage-backed securities,” he said.

In addition to Patelco's corporate finance and accounting duties, Waite is also in charge of ALM and investments, plastic card services and the investment brokerage and insurance subsidiary. He also ran the credit union's e-commerce and information technology areas during Y2K.

When the NCUA seized U.S. Central and WesCorp in March 2009, credit union leaders were left scrambling to explain, and in many cases learn, how mark-to-market accounting affected corporate investments, capital impairments and 5300 reporting. Not only are accounting standards constantly evolving and increasingly conforming to global standards, the seemingly cut-and-dry discipline has a number of subjective, gray areas that are hard enough to understand, let alone explain to management teams and volunteers. As an expert in the subject, Waite said he received numerous calls from colleagues in 2009, seeking a peer's opinion on proper accounting treatments.

Waite has been an industry leader, making regular cross-country flights from San Francisco to Washington to advise CUNA on accounting and regulatory matters for the past 10 years. In 2003, he became the first credit union representative ever appointed to the Financial Accounting Standards Board Advisory Council, a prestigious group of 33 policymakers which include the controller general, high powered corporate executives and the nation's top academics and analysts.

“Since the Sarbanes-Oxley reform, I have enjoyed making a difference in the deliberations to change the financial reporting landscapes of American companies,” he said. “Setting policy has been an exciting change to the role of executing policy for so many years. Helping share the future landscape has been an honored role that I share with the most cerebral individuals that share in this passion for greater transparency in our reporting systems.”

He has built a reputation for being an outspoken supporter of small business as FASB sets accounting standards. In early December 2009, when FASB addressed financial instruments, Waite provided valuable testimony regarding the differences between public and privately held companies, some of which later turned up in FASB Chairman Robert Herz's statements on the subject.

“The decoupling of banking regulations from financial reporting objectives is something that Chairman Herz and I share in common,” he said. “Decoupling does not mean deviating banking regulations from GAAP. It means that capital standards for institutions should not be dependant solely on the accounting rules of the day.”

Regulatory bodies should not use the U.S. accounting standards as their benchmark for judging the safety and soundness of our financial institutions, he said. Rather, regulators like the NCUA have the ability to establish suitable capital levels for their institutions, and FASB respects their right to ensure the safety and soundness of their industry.

Waite said he answered a number of questions at last year's GAC regarding paper losses versus actual losses. History has shown that the two are not mutually exclusive, he said.

Fair value accounting will continue to be a challenge for credit unions, he said, and in today's global economy, “We need to realize the inherent risks of our financial decisions.”

Credit unions are a unique business model, he said, and it takes unique individuals to successfully impact the lives of others.

“I started in the footsteps of a giant in the industry, and I'd like to think that he is looking down on me right now wondering what it is I can do next,” he said.

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