Financial Performance Not Measured In AVacuum

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ORLANDO, Fla. - (06/17/05) -- The squeeze on earnings at creditunions is putting even more emphasis on understanding what'sdriving the bottom line. At the $1.9-billion Hudson Valley FCU, ithas meant providing more education to the board on the workings ofthe CU's Asset/Liability Committee (ALCO). The goal, said the CU'scontroller, Michelle Mcourt, while attending CUNA Mutual'sDiscovery Conference here, is to ensure financial performance isnot being measured in a vacuum, and that board members understandthe financial causes and effects. In addition, it has also justformed a cost-control committee that it is looking to draw upon theinsights of front-line staff and others below the senior managementlevel for process improvement. Similarly, the $1.5 billion CoastalFCU in North Carolina holds quarterly ALCO meetings, with relateddocuments distributed each month, said finance manager Barry Hooks.Hooks said rising rates in a flat-yielding investment market,coupled with the CU's own success in indirect lending, put greatliquidity pressure upon Coastal. The CU has responded by repricingof loans, by selling participations in some loans, and by doingsignificant wholesale borrowing, often turning toWesCorp.

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