c. myblog

October 29, 2010

Does Your NEV Analysis Really Capture Fair Value Of Assets?

If your credit union runs a Net Economic Value (NEV) analysis as part of the A/LM process, how do you determine the credit union’s loan discount rate assumptions? Sometimes we hear credit unions say that their current loan offering rates are used as the discount rates in their NEV models.  We do not believe this […]

October 15, 2010

The New Word of Mouth: Revolutionizing How Younger Members Find You

Nobody will argue that the way we search for information over the last 10 years has changed dramatically.  Gone are the days of bulky Yellow Pages and encyclopedias; if someone—especially the younger generation—wants information, they turn to search engines.  According to the Pew Internet & American Life Project (January 2009), 87% of Gen Y use […]

October 7, 2010

43.4 Million People…

Consider that… “25.5% of consumers, nearly 43.4 million people now have a credit score of 599 or below.” Who knows where credit ratings will be when the economy settles down.  We think it would be helpful for decision-makers to have a strategic discussion on the role credit scores will play in lending decisions: Will the […]

September 16, 2010

Budgeting During Times Of “Unusual Uncertainty”

Creating a budget is always a challenging and uncertain process.  Developing the annual budget for 2011 may be unusually difficult as there is heightened uncertainty about loan demand, interest rates, investment yields and deposit trends.  Net operating expense concerns include share insurance assessments, threats to non-interest income and provision for loan loss trends—stable, declining, or, […]

September 9, 2010

Annual Long-Term Financial Planning Process: Include A Deflation Scenario

We strongly recommend that credit unions annually invest the time to forecast financial performance for at least three future years.  The baseline forecast should compliment the strategic plan and include the cost of major initiatives, as well as expected growth trends.  If the baseline does not produce satisfactory performance, determine what changes could be made.  […]

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