Bouncing Back After the Recession

CUs’ top planning strategies include proactive lending and mobile banking.

June 27, 2013
/ PRINT / ShareShare / Text Size +

5. Meager earnings

Credit union earnings will be meager. Earnings as measured by return on assets are expected to decline from 0.84% in 2012 to about 0.75% in 2013 and 2014. A 10 basis point (bp) decline in net interest margins (from 2.9% in 2012 to 2.8% in 2013) will be partially off set by a 5 bp decline in loan loss provisions. For perspective, credit unions were earning a 5.3% spread 30 years ago.

To boost net interest margins, credit unions are searching for alternative assets and weighing their marginal risk (credit/interest rate) against their marginal return (additional yield on assets).

Area demographics—including population growth, median household income, local industries—and age trends also will influence margins.

Focusing on core deposits and their “stickiness” will increase your credit union’s opportunity for higher interest margins when short-term interest rates start to rise in 2015.

NEXT: Advocacy efforts

Post a comment to this story


What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive