Innovation: The business case for risk taking
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Innovation | the business case for risk taking Rick Rambo | Director | FORUM Credit Union Doug True | President | FORUM Solutions & SVP of Innovation @ FORUM Credit Union
description
Presentation for the 30th Annual National Director's Convention
Transcript of Innovation: The business case for risk taking
Innovation | the business case for risk taking
Rick Rambo | Director | FORUM Credit Union
Doug True | President | FORUM Solutions & SVP of Innovation @ FORUM Credit Union
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I CU
Innovation Grading Scale
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Promote Change
Neutral
Risk Averse – Status Quo
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I our model
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partner architect
business owner
corporate pharmaceutical
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retired corporate telecommunications
asst. school superintendant
Retired corporate telecommunications
former Enterprise executive – now realtor
commercial building
executive
business owner
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Trust
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New Members & Businesses
Net Interest Margin Loan Mix/Growth
Member Deposit Mix/Growth
Member
ROA
LiquidityMarket/
Account Growth
Assets Under ManagementCross-Sells/Referrals
Non-Interest Income Expense/Income Ratio
Net Worth Ratio
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..\directors\Organizational.xls Year-to-Date
Name Goal Actual Variance Year-End Goal
Member Satisfaction
Loyalty Index 90% 88.5% -1.5% 90%
Raddon Quarterly Survey Satisfaction % 90% 95% 5% 90%
ROA
ROA 0.32% 0.45% 0.13% 0.60%
ROE 3.34% 4.68% 1.34% 6.36%
Yield on Assets 5.85% 5.80% -0.05% 6.05%
Cost of Funds 3.15% 3.09% -0.06% 3.27%
Net Interest Margin 2.70% 2.71% 0.01% 2.78%
Fee Income $4,277,664 $4,218,767 ($58,897) $14,200,000
Net Income $1,055,566 $1,482,875 $427,309 $6,200,000
Net Worth Ratio 9.41% 9.64% 0.23% 9.36%
Expense to Income Ratio 52.26% 52.76% 0.50% 49.06%
Delinquency Ratio 1.11% 0.99% -0.12% 1.00%
Net Charge-off Ratio 0.35% 0.39% 0.04% 0.35%
Provision for Loan Loss Expense $1,500,000 $1,500,000 $0 $4,500,000
Liquidity
Total Assets $1,014,000,000 $993,215,935 ($20,784,065) $1,075,000,000
Liquidity Ratio > 3.00% 6.87% 3.87% 5.52%
Loan Originations $125,791,000 $112,643,272 ($13,147,728) $431,198,000
Yield on Originations 8.10% 8.26% 0.16% 8.07%
Total Loan Balances $847,077,611 $837,925,538 ($9,152,073) $923,925,000
Yield on Loans 7.04% 7.02% -0.02% 7.20%
Total Deposit Balances $702,134,052 $701,335,542 ($798,510) $732,895,000
Cost of Funds - Deposits 3.19% 3.17% -0.02% 3.31%
Loan to Deposit Ratio 121% 119% -1% 126%
Borrowed Funds $205,347,948 $184,149,583 ($21,198,365) $230,755,000
Cost of Funds - Borrowing 4.73% 4.71% -0.02% 4.82%
Market & Account Growth
Membership 96,120 95,682 (438) 98,500
Assets Under Management - FORUM 1st $92,835,226 $96,821,865 $3,986,639 $115,000,000
Quality Referrals - Closed 916 1,116 200 2,760
Retail Checking - Net Account Growth (#) 467 946 479 1,475
Retail Checking - Average Account Balances $2,071 $2,003 ($69) $1,850
Business Checking - Net Account Growth (#) 80 159 79 275
Business Checking - Average Account Balances $16,899 $12,335 ($4,565) $18,250
Process
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Consistent Processes
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Examples
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buildingbusinesses
product offerings
delivery channels
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burial plot financing - $2,000 - $5,000
5% rate & $50 application fee
200 – 400 monthly new members
full recourse
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In today’s hyper-competitive world maintaining the status quo is no longer an option.
Continue the conversation @ dougtrue.net
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