c. myblog

July 2, 2010

Establishing Concentration Limits

Establishing concentration limits that enable you to make sustainable, sound business decisions while trying to satisfy new regulatory pressure is very tricky. The supervisory letter on concentration risk states that examples of concentrations within an asset class include… “Residential Real Estate Loans—collateral type, lien position, geographic area, non-traditional terms (such as interest-only, payment option, or […]

June 24, 2010

When Will This Be Over?

It’s natural to wonder when things will get back to “normal.”  But week after week, the only thing consistent in the economic indicators is that they are not consistent.  So how do we plan for the future? Most credit unions are designed to thrive in a different type of economic environment─one we may not see […]

June 17, 2010

Prolonged Low Rate Environment?

For months many have been watching and wondering when the inevitable increase in market rates might materialize.  Now, with some economists projecting that rates will stay at historic lows for another 12-18 months, credit unions should evaluate how, or if, they can continue to maintain net interest margin and ROA. Not all institutions have room […]

June 10, 2010

Comments on NCUA Concentration Limits Supervisory Letter

We have received many calls on the NCUA Concentration Limits Supervisory Letter.  Credit unions are asking us what limits will satisfy NCUA or if there are any standard limits. The answer is:  there is no standard answer.  This was stated by NCUA in conversation along with NCUA’s statement, there is no magic formula, during a […]

June 3, 2010

Are Your Members Sending You A Signal?

According to NCUA’s first quarter data, shares grew an average of almost 11% (annualized) while loan growth declined 4.76% (annualized)─over a 15% differential.  Funds not loaned out are sitting in investments (generally not earning very much) and are putting a squeeze on the margin.  With loan demand down, many of our clients are requesting what-if […]

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