Expense Management Strategies

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ORLANDO, Fla.-Steve Ravin, EVP/CFO with Tyndall FCU, offered these additional thoughts about expense management during the League of Southern Credit Unions' annual meeting:

• Branch Profitability/Product Profitability. " I know lot of vendors sell very sophisticated products" in this area. Tyndall FCU had been using such a solution, as well, at a cost of about $30,000 in annual maintenance fees, over and above the initial cost. "One of the biggest stumbling blocks for a lot of people is how to allocate the overhead expenses. It leads to a lot of irrational thinking. You don't need to do that. If you have built the cost centers, you can build out an Excel spreadsheet and know on a macro basis what branches and what products are profitable for you. Then you can make the decision, 'Do you really want to market products that are unprofitable?' "

• Cut Your Losses. "When you ID products or offices that aren't profitable, cut them. It sounds easy, but it's something credit unions aren't very good at. We in management made the decision to open these offices and offer these products. When we did that we should have laid out in advance the results we expected to achieve. And when we don't, eliminate them and the drain on earnings."

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