How Do You Solve A Problem Like Deposits?

The share growth strategies featured this week on CreditUnions.com will ensure the industry continues on its trajectory of superior financial performance and member service.

 
 

Last week, Chip Filson explained why first quarter share growth is critical to sustained lending success in 2015.

“Credit unions use shares to fund balance sheet loan growth,” Filson says. “Growing shares in the first quarter of 2015 should be a top priority for credit unions. If they are to continue to fund the increasing loan demand that is generated by an improving economy, then they must re-energize their share growth."

This week, CreditUnions.com offers deposit growth strategies to help credit unions do just that.

Interra Credit Union has been focusing on loan growth for the past year, but its increased lending means it also needs deposits. That’s why the Indiana credit union launched a specially priced, limited-time CD. It wanted to see if it could quickly increase deposits in a pinch and test its members’ appetite for a high-rate certificate of deposit. The CD special averaged more than $1 million per day. Here’s how Interra did it.

As many banks today are throwing aside deposit incentives, such as free checking, to save their profits, two credit unions with different end goals are not only maintaining free checking but also pricing deposits more aggressively than the competition. Idaho-based Capital Educators Federal Credit Union wants to attract core deposits to support the growth it has achieved in its loan portfolio. Washington-based BECU wants to control how and where new deposit activity occurs. Both are achieving their objectives; learn more today.

BCU in Illinois has a 102% loan-to-share ratio and has increased its total loan portfolio approximately 10% every quarter since the second quarter of 2012. Now, the credit union is finding value in focusing on deposits, too.

“They go hand-in-hand from a liquidity perspective,” says Ken Dryfhout, director of balance sheet management at BCU. “You need the dollars if you are going to lend them.”

Learn how BCU’s commitment to deposits has contributed to 6.66% share growth year-over-year and total share balance of $1.8 billion.

Finally, First Imperial Credit Union’s Opportunity Checking fresh start account combined with a short-term loan has helped the California credit union shore up its balance sheet and cut into the business of local payday lenders.

“It’s easy to help those that have perfect credit scores and stable jobs,” says CEO Fidel Gonzalez. “When you position your credit union as one that is willing to work with those that truly need it, the word gets around.”

Under Gonzalez’s tenure, total checking accounts have grown from 3,500 to 5,200, about one third of its membership. Plus, its third quarter 2014 share growth was nearly nine times that of peer credit unions with $50 million to $100 million in assets. Learn more today.

And for those who are unsure how to price deposits and loans in today’s environment, check out 3 Graphs About Interest Rate Risk. The concepts discussed provide context to where different asset-liability management (ALM) decisions will place credit unions in relation to peers and offer different ways to evaluate the balance sheet. Armed with this information, leaders can develop timely ALM strategies. Check out the graphs, then watch the corresponding webinar for a deeper IRR discussion.

Happy Reading.

 
 

Jan. 12, 2015


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