Tough 2nd Half In 'Buying And Selling'
KANSAS CITY, Mo.-For Brandon Michaels, CFO at Mazuma CU here, the first half of 2011 has been fairly positive. The rest of the economy, however, "is still going to be a tough go," he adds.
"Interest rates, I believe will stay stagnant for the rest of the year, and short-term rates will not increase," predicted Michaels. "I don't anticipate the Fed Funds rate going up until 2012, and all of that has a dramatic impact on credit unions' ability to buy and sell money. That's our business model and it makes it pretty hard to make money."
Michaels posited that while Mazuma's forecast for the remainder of the year is improved from what he might have predicted in January, much of that comes from decreased operating expenses, including renegotiating vendor contracts and reducing-but not eliminating-annual merit increases.
While Mazume Credit Union has not been forced to layoff any staff, Michaels explained that as attrition occurs the credit union is closely examining every position, and some jobs have not been re-filled when staff moved on. Michaels said that he expects that to remain the norm for the foreseeable future.
Room To Grow, Not Hire
"I came here in 2009 and I've thought from the outset that we were inefficient and had too many employees for the number of members that we serve," he said. "I would anticipate that there is still probably a little room to grow without expanding or hiring significant numbers of people."
Mazuma implemented overdraft protection from John M. Floyd & Associates in early March and saw a $100,000 increase compared to the previous March. But Michaels predicted that would ebb and flow with the seasons.
The credit union is not planning any significant promotions for the remainder of the year, said Michaels; rather, current initiatives-such as a 2.99% auto loan-will depend on what the market does. "We haven't defined an end date, but it's not going to go ad infinitum; it just depends on what happens."