How 1 CU Has Relieved Presure

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Loan volume has been strong at the $1.5-billion Coastal FCU in Raleigh, N.C., where the loan-to-share ratio is a healthy 97.6%.

Operating with an ROA of .98 and a net worth of 11.5%, the credit union has helped boost the bottom line with the sale of loan participations, according to Finance Manager Barry Hooks. Hooks, who began his career with the CU as a courier, said the ALCO at CFCU includes the CEO, CFO, COO, senior VP-IT and strategic business officer, the secretary/treasurer of the board, and himself.

ALCO meetings are held quarterly, with materials distributed each month. Twice each year it uses a third party to conduct an ALM review. It also had a core deposit study completed by an outside party that is updated quarterly.

In 2003 and 2004, Hooks said the credit union, like others, began seeing rising rates even though yields remained flat. A high volume indirect lending program was also adding to liquidity pressures. Coastal FCU responded with a repricing of loans, by selling participations in some loans, and by doing significant wholesale borrowing, often turning to WesCorp.

All of those steps, he said, plus growing non-interest income, have helped alleviate at least some of the margin pressures the credit union is feeling.

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