DALLAS-One of the best ways to drive long-term growth is to avoid ALM missteps in 2010. Bad choices could easily be made this year, stressed Tom Manley, partner at ALM First, who sees shrinking margins tempting CUs to invest long term.
"That could create ALM problems down the road," he cautioned. "As credit unions grow this year they have to carefully watch the ALM picture because they are trying to maximize margins at a time when ROA is being squeezed."
Credit unions also need to have sound strategies when it comes to loan growth, Manley added. "I think the loan market will be there for credit unions if they want it because of the banks' actions. They just need to be smart about what they are doing."
Manley reminded that the best way to grow loans is with a balanced portfolio that does not concentrate to any great extent in one line of business, or in one geographic area. Small business lending, while an excellent opportunity, could present that problem, he suggested. "I've seen it happen. A credit union works closely in one area of town, and then the community does not do well there and the credit union gets hammered. A good way to avoid any of these potential problems is to have a sound strategic plan."
