Recent bank failures, growing liquidity pressures, interest rate uncertainty and falling consumer savings have created uncertainty about credit unions’ financial outlook.
The first quarter 2023 call reports are in. There are a range of results, as usual. Below is Wright-Patt’s CEO Tim Mislansky’s summary of the numbers for his team. He opens with a one sentence conclusion.
Solid Performance
“We ended the first quarter with solid financial results.
Loans to members were up a whopping $70.7MM from February, were up $724.9MM from a year ago and are $177.8MM above our budget.
Member deposits jumped a big $182.8MM from February (due to the month end on a Friday payday), were up $445.7MM from a year ago and are $70.8MM over budget.
While both are results to be excited about, it is important to remember that we fund our loan growth with deposits. Continuing a pace where loan growth is significantly higher than deposit growth is not sustainable.
Net income for March was $8.7MM and year-to-date is $25.3MM. This is $6.5MM above our budget, but $2.2MM behind last year.”
He proceeds to review key items for the month and changes year-over-year including net interest income, non interest income, loan loss provisions and operating expenses versus budget. He concludes: “We remain pleased with our early progress in financial results.”
How Were These Results Achieved?
The important issue is not what the results are, but how they were accomplished amidst so much macro economic uncertainty.
To understand these financial outcomes, one must look at the other parts of CEO Mislanksy’s monthly report. He opens with two recognitions.
The first honors a 47-year retiring employee, Kathy Denniston, in the Member Help Center. The credit union was chartered in 1932. This employee has been serving members for more than half the credit union’s existence, and arguably during the most difficult competitive time frame. Sold performance starts with culture, the commitment of the employees.
The second comment relates a story which Tim calls Moments of Impact. They are brief descriptions of exceptional responses by employees (partners), in this case the Enterprise Risk Manager:
I often say that it is everyone’s job to take care of members and Corey did just that recently. Corey is a part of the security team that deals with incident reports – which are commonly sent through if a member or Partner has an accident, gets hurt in one of our centers, or if there is erratic behavior.
A couple of weeks ago, an MHC Partner submitted an incident report because a member who was declined for a mortgage started making some comments about depression and wanting to end his life. When Corey saw this, he replied to the larger group and asked what we typically do in these situations, because he wanted to help. Honestly, we do not have a standard protocol for this situation.
Rather than let it go, Corey took it upon himself to call the member to see if he was okay. He made sure the member had some resources and contacts that he could call for help. Taking that extra step just showed how much Corey cared and the type of people we have here at WPCU.”
The Performance that Really Counts
While financial numbers are one way of tracking performance, for Wright-Patt the focus is not on growing assets, loans or deposits. Growth results from doing the right things. Rather the credit union starts with impact, what it can do for its members, potential members and employees.
While over 90% of its deposit are insured, its share stability is due to member loyalty, not insurance. The credit union is trusted by members. Their loyalty underwrites the credit union’s ongoing success that started 91 years ago and continues to expand quarter by solid quarter. member by member.
(I thank Tim for allowing me to use this example from his monthly report to his team)