DALLAS-Planning sessions should consider whether the CU has the right balance sheet tools to grow in an economy that will continue to present opportunity in 2010, according to ALM First Financial Advisors.
Angela Calvert, partner at ALM First, believes next year will be "fertile ground" for credit unions to capture market share from banks in many areas. But to do so without understanding how that expansion could impact the balance sheet is a mistake, she said. "Credit unions have to have the tools and the ability to assess all of the options that are in front of them now so the best risk-return profile is achieved. They need to have a plan that revolves around risk management and their income performance forecasting-how is this new business going to be beneficial from an income standpoint and is it worth the risk they are taking on?"
Calvert added that final plans for growth, many of which may center on lending, must also include alternative scenarios. "If you are looking into new products in order to capture market share, you need to be able to properly assess why the product is not being taken on by rest of market, and is there a better alternative to the loan that you are seeking to take on, such as the secondary market."
Calvert also advised dedicating time to liquidity strategies - including a liquidity contingency plan in case the economy worsens - and ways to build capital effectively.
For info: www.almfirst.com
