Mid-Year Update

[ 0 ] July 18, 2016 |

As I write this article your IAACU team is busy evaluating and recording second quarter results. Since we are a financial cooperative and you are our owners, I thought it appropriate to communicate how we evaluate the performance of your Credit Union.

Measures used to evaluate performance are divided into two broad categories: 1) Net Growth Metrics to include: Assets, Members, Loans, and Total Products. 2) Performance Indicators to include: Return on Average Assets, Delinquency, and Net Worth (among many others).

Couple giving two young children piggyback rides smiling

Growth is an indicator of the overall health of the credit union. When members trust their credit union, they deposit more, refer their friends, and generally do more of their financial business there.  Over the past 12 months IAACU has grown assets from $205.5M to $220.1M (↑7.1%), memberships from 15,241 to 15,659 (↑2.7%), loans from $145.0M to $148.9M (↑2.7%) and total products from 43,825 to 45,006 (↑2.7%).

Performance indicators are measures of how well the credit union’s assets are managed. A key indicator is return on average assets (ROAA) which is net income divided by average total assets. At 1.02% IAACU’s ROAA is nearly twice that of our peers (higher is better), indicating very strong financials.  The delinquency rate is the aggregate of loans with overdue payments divided by total loans.  With a delinquency rate of 0.19% IAACU is well below our peers (lower is better) who on-average are over four-times this amount.  We accredit this to strong member relationships and a team that is passionate about working with our members to advance their financial well-being.

Perhaps “the” key indicator of financial strength is net worth.  Net worth is a measure of the capital strength of the credit union and is calculated by dividing total net worth (retained earnings) by total assets.  A “well-capitalized” credit union, by the National Credit Union Administration (NCUA) examiner guidelines, is defined as 7% or greater.  IAACU’s ratio is 10.40%, well above “well-capitalized”.

These are just a few of the many ratios, metrics and indicators that the IAACU team evaluates to ensure your credit union remains safe and sound. We are also busy executing our 2016 business plan to bring the latest technology, safety and conveniences to our members.  An example would be our recent roll-out of the Visa EMV chip cards.  Thank you for your patience as we moved nearly 6,000 Visa cards to a new partner and reissued our entire portfolio new cards with this enhanced security.

We are continually investigating new and better ways of serving our members, and making certain we can provide you with the very best products, services, safety and financial strength available. We offer our sincere appreciation for your continued support and membership!

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Category: CEO Corner, Featured

About the Author ()

Sean has held the position of Chief Executive Officer at the IAA Credit Union since June of 2005. In this position, he is responsible for the overall management of the $200 million financial institution, assuring financial strength while providing maximum value to its members. Also, he ensures that the Credit Union complies with all State and Federal laws and operates within the policies and expectations of the IAACU Board of Directors.

He is a 1986 graduate of Illinois State University where he received a Bachelor of Science Degree in Agribusiness with a minor in Economics. He has also completed the coursework and received the CPCU, ChFC and CLU insurance industry designations. Sean served a combined 20 years in the United States Air Force and Air National Guard as an Aircraft Maintenance Officer retiring in 2002 at the rank of Major.

Sean and his wife Kim have five children and reside northeast of Eureka, Illinois in Woodford County.

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