CFO: Tim Lukomski
Credit Union: Heritage FCU
Market: Newburgh, Ind.
Assets: $317 million
In this market there's a bit of relief as deposit rates have been declining.
"It has settled a lot since the bailout money started coming in," said Lukomski. "We try to keep our regular rates toward the top of the market. When the banks run specials, members become accustomed to coming in and asking us to match rates."
That has pushed HFCU to take a closer look at who gets upgraded. "We don't just automatically match the rate anymore," he said. "We look at the relationship with the member to determine whether we'll match or not. Only good members get the higher-paying CD."
Heritage also empowered staff to do some wheeling and dealing. "Our staff can do 25 basis points, no questions asked," he said. "Anything above that comes to either our CEO or me, the CFO. But our staff has gotten a lot better about knowing what to do and how to do it."
One of the big banks in Heritage's market was offering a one-year CD at 4.05%, compared to its own at 3.70% APY. "Once the bailout money hit, they dropped their rates significantly, but it was tough."
Heritage has moved away from doing specials. "Our CD portfolio makes up a huge portion of our deposits," Lukomski explained. "Now we are trying to keep our members without going and buying CD money. Specials can be very good if they're structured correctly, but the problem with specials is that they remind people to shop rate. We have really been able to drive down our cost of funds on CDs. At the beginning of the year we were at 4.75%, now we're down to 4.03%."
