A presentation on
Small Asset Size Credit Union Forum
Call-in Information: 800.791.2345, access code: 13177#
October 13, 2010
Today’s Agenda • • •
Welcoming Remarks
– Update on LSCU – Board Planning/Renewed Commitment to SAS CU Program Importance of Strategic Planning Laura Vann
Resources – – – –
• • • •
Patrick La Pine
CUNA Research & Statistics Alabama Profile & Florida Profile Maximizing the Custom Performance Report High Performing Credit Unions
SAS Toolkit Initiatives Account Compliance Update Other Topics/Questions – NCUA Town Hall Meetings
Adena Whitman Jeanie Henson David LeNoir Amber Tynan Laura Vann/Adena Whitman David LeNoir Scott Morris
THE IMPORTANCE OF STRATEGIC PLANNING
What is Strategic Planning? • Strategic planning is the process of determining a credit union’s long-term goals and then identifying the best approach of achieving those goals. • The strategic planning process answers three key questions: – Where are we today? – Where do we want to be in the future? – What should we be focused on today so we’ll be where we want to be in the future?
Why is Strategic Planning Important? • •
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Examiners look at a credit union’s strategic plan and business plan as part of their analysis of strategic risk in the exam process Strategic risk is the current and prospective risk to earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes Strategic risk is a function of the compatibility of a credit union’s strategic goals, the business strategies developed to achieve those goals, and the quality of implementation The tangible and intangible resources needed to carry out business strategies include communication channels, operating systems, delivery networks, monitoring systems, and managerial capacities and capabilities
Questions to Address in Strategic Planning • Other key questions that are addressed as part of the strategic planning process are: – – – – –
What is our mission? Who are our members? What do our members value? What are our results? What is our plan?
Outcomes of Strategic Planning • Develop long-term strategies, short-term strategies and tactics that will ensure goal achievement • Develop the foundation for the strategic business plan, a document that outlines exactly how the credit union will achieve its long-term goals • Align growth plans with budget – Any goals should fit within the credit union’s established budget – Impact of proposed goals on key financial performance ratios should also be considered
Development of Strategic Business Plan • Strategic business plan will include the following elements: – – – – – – – –
Executive Summary Management and Volunteer Structure Market Analysis Growth Plans Marketing Plan Operating Strategies Risk Management Financial Goals
STRATEGIC PLANNING RESOURCES
CUNA Resources – CU Data & Statistics • CU Data & Statistics – Monthly Credit Union Estimates [PDF] The Monthly Credit Union Estimates is generated from credit unions who volunteer to submit a brief summary of monthly financial information. – Credit Union Reports – Annual Credit Union Data – U.S. Credit Union Profile - Second Quarter 2010 (June 2, 2010)
CUNA Resources – CU Data & Statistics • Credit Union Statistics - Members Only – – – – – – –
Recent CU Trends (10-year; Detailed Overview) Bankruptcy: State-by-state overview [PDF] State-by-State Credit Union Financial Summary [PDF] (December 2009) State by State Bank/CU Overviews State by State Member Business Lending Estimates Asset Quality Trends [PDF] or spreadsheet [XLS] (December 2009) Asset Quality Trends by State [PDF] or spreadsheet [XLS] (December 2009) – "Underserved" Census Tracts: State-by-state
CUNA Resources – CU Data & Statistics • CU vs. Bank Comparisons – – – –
State by State Member Business Lending Profiles Congressional District Level Credit Union Member Benefits Frequently Requested CU/Bank Comparisons [PDF] Commercial Banks & Credit Unions: Facts, Fallacies, and Recent Trends [PDF] – State by State Credit Union Member Benefits
Alabama and Florida Profiles • Quarterly economic profiles prepared by LSCU regulatory compliance staff members • Provides economic and financial data pertinent to Alabama and Florida – Profile prepared for each state
• Sent to credit unions via email and also available in the Governmental Affairs section of the LSCU website (this data is password protected) – Research & Economic Data
Alabama and Florida Profiles • Profiles contain information and charts on various economic indicators and other data important to credit union strategic planning – – – – –
Unemployment rates Real estate prices Delinquent loans to loans Net charge-offs Return on average assets
• Profiles include quarterly snapshot comparing credit union asset groups • Profiles also compare key ratios in state over past five years
Alabama and Florida Profiles • Excellent tool to use in strategic planning process • Use in conjunction with your credit union’s Custom Performance Report to develop the foundation for your strategic plan and business plan
Maximizing the Custom Performance Report • 35+ page financial analysis document provided quarterly for each credit union (upon the release of the NCUA call report data) • Provides insight and due-diligence into a credit union’s financial performance • Customized and individualized for each credit union. • Highlights key performance areas in a way that can be reviewed in a single Board meeting • Provided FREE of charge to each affiliated credit union
HIGH PERFORMING CREDIT UNIONS
High Performing Credit Unions • Concept of high performing credit unions developed by credit union consultant Tony Ward-Smith • Direct correlation between members use of credit union accounts and net earnings • Credit unions that consistently do more business with members are able to do more for members
High Performing Credit Union Characteristics • An average of just 2.5 accounts per member is the first requirement for achieving high performance status – – – – – – – – – –
Share Checking Certificates of Deposit IRAs Money Market Accounts Credit Cards New/Used Auto Loans 1st Mortgages Other Real Estate Loans Consumer Loans/Unsecured Loans
High Performing Credit Union Characteristics • Account balances indicate utilization. High performing credit unions must simply show average combined (deposits and credit) account balances of $4,746 per member, the 2009 national average • High performing credit unions must have positive net earnings
High Performing Credit Unions • Through FREE resource available at www.ward-smith.com, credit unions can run comparisons between their credit union and any other credit union in the U.S. – Data comes from NCUA 5300 Call Reports – Credit unions are grouped by number of members and state
• Comparisons look at member usage of products and services only – Only ratio compared is ROAA
• Great resource to use in conjunction with your Custom Performance Report – Valuable in developing growth benchmarks for products and services
SAS TOOLKIT
SAS Toolkit • The Small Asset Size Credit Union Toolkit is a valuable, everexpanding resource containing budget, business plan, financial education and financial projection templates, questionnaires, sample presentations, and best practices studies. – – – – – – –
BSA Risk Assessment Resources Branch Set-up Checklist Financial Projections/Budgeting Template Business Plan Template OFAC Match REAL Solutions Payday Loan Alternative Toolkit Tools to Promote Direct Deposit
SAS INITIATIVES ACCOUNT
SAS CU Initiatives Account • Available to affiliated credit unions under $35 million in assets • $400 account in your name • Can be used to purchase any LSCU or League Service Corp. (LEVERAGE) product or service • Must be used before the end of 2010
SAS CU Initiatives Account • Possible uses of initiatives account: – LSCU Education and Training Events • Development Conference • BSA Training
– STAR/MERIT/VAP Modules – LSCU Strategic Planning Sessions – LSCU Service Corp. Products • Gift Card program • Audits • Ventelligence
REGULATORY COMPLIANCE UPDATE
Regulatory Compliance Update • Update on NCUA Town Hall Meeting on October 12th – Corporate Stabilization
• Review of regulatory and compliance issues affecting small asset size credit unions – Important compliance dates to remember
• Compliance Helpline – Delivers compliance advice, information and recommendations – Provides authoritative, definitive and accurate information to assist in the day-to-day operations of credit unions
• Online Compliance Manual – – – –
Federal, Alabama and Florida-specific content Checklists for compliance Direct links to laws and regulations Frequently asked questions
• Compliance Calendar – Regulatory Compliance Effective Dates – Operational Compliance Event Dates
• Model Polices
Questions?
LSCU Contact Information: Alabama-based Staff:
Florida-based Staff:
Laura Vann, Vice President of Cooperative Initiatives Email: laura.vann@lscu.coop Extension: 2181 Cell: 205.747.8675
Jeanie Henson, Member Relations Specialist Email: jeanie.henson@lscu.coop Extension: 1038 Cell: 850.212.9059
Adena Whitman, Director of Member Relations Email: adena.whitman@lscu.coop Extension: 2134 Cell: 205.887.1446
Amber Tynan, Member Relations Specialist Email: amber.tynan@lscu.coop Extension: 1154 Cell: 850.345.8352
David LeNoir, Member Relations Specialist Email: david.lenoir@lscu.coop Extension: 2158 Cell: 251.656.6408
LSCU Toll-Free Number: 1-866-231-0545 Patrick La Pine, President/CEO Email: patrick.lapine@lscu.coop Extension: 1002 Cell: 850.212.3160
Cassandra Grayson, Association Services Chief of Staff Email: cassandra.grayson@lscu.coop Extension: 1004 Cell: 850.345.1454
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LSCU SAS CU Forum October 13, 2010