BEAVERTON, Ore. — The corporate assessment has kept the $2-billion First Technology CU ALCO busy, revising its 2009 strategic plan twice, explained CFO Hank Sigmon.
"Our two plan revisions came about, first, from the January announcement by the NCUA,, and then from the conservatorship of WesCorp and U.S. Central," Sigmon shared.
Sigmon said the CU's ALCO has talked at length with the board about the NCUA actions and the impact on its balance sheet. "Last year we talked to the board about the relationship between growth, capital, and ROA. We discussed the concept of sustainable growth given different levels of ROA and a desired capital ratio. At that time we had a three- to five-year horizon to get the ROA up to support our current level of growth. This recent NCUA action has shrunk that time horizon considerably and will certainly influence our 2010 plan discussions."
First Technology closed 2008 with 8.62% capital.
First Technology is well aware of the potential for additional costs related to the corporate rescue efforts. But Sigmon reminded that the credit union "can't manage the balance sheet in fear. We have taken a look at what other exposure we may have in terms of our capital investments in other corporates, as well as the Federal Home Loan Bank, and modeled the impact on capital if we experienced some level of impairment. We know what those numbers are and what our capital ratio would look like given an 'event.'"
