Credit Union Exam Solutions Presents With Flying Colors Sticky Deposits & Storm Clouds: What’s Ahead for Credit Unions?
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Jul 8, 2025 Thomas Griswold, Managing Director at ALM First Financial Advisors, shares his expertise on navigating the evolving economic landscape for credit unions. He discusses the vital role of capital management and pricing risks effectively to maintain stability. The conversation highlights trends in loan growth, funding challenges, and the significance of liquidity post-rate hikes. Griswold also delves into the importance of talent retention strategies and the impact of mergers on the industry's future. Listeners gain practical insights into optimizing performance amid uncertainty.
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Interest Rate Risks Reawakened
- The industry experienced a long zero-rate environment which dulled focus on ALM and liquidity risks.
- Rapid rate increases revived these risks, deeply impacting credit unions' balance sheets and liquidity profiles.
Price Risk, Don't Chase Volume
- Avoid chasing loan volume by dropping rates if demand is lacking.
- Always price risk correctly, regardless of pressure to grow loan numbers.
Profit Margins Catch Breath
- Profitability pressures have eased as deposit competition cools and margins stabilize.
- However, institutions should not be complacent and must monitor future risks carefully.