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Exploring the 30-Year Relationship: Catalyst Strategic Solutions and JSC FCU

by Catalyst Corporate | May 22, 2018



Houston, we have a solution. Since lifting off 30 years ago, Catalyst Strategic Solutions (CSS) has provided advisory services and investment expertise to Houston-based JSC Federal Credit Union. And CEO Michael Brown has guided credit union mission control the whole time. Mike_Brown_r_810 300ppi

As Brown eyes retirement at the end of August, he reflects on the special bond between JSC FCU and CSS. After all, the credit union was one of the CUSO’s six original clients.

“Our partnership began in the mid-to-late 1980s,” said Brown. “We were searching for an alternative investment source for our excess funds.”

The savings-and-loan crisis was gaining momentum, Brown said, forcing JSC to pull investments out of savings-and-loan instruments and re-invest them. Finding viable investment options for several hundred jumbo CDs proved difficult.

“It’s hard to pull out $100,000 at a time,” Brown said. “We’ve always wanted to maintain short-term, secure investments. Catalyst gave us the opportunity to do that.”

“The Advisory Service came along at the right time,” he added. “It allowed us to invest larger chunks of money, using relatively safe instruments. We were able to get out of savings-and-loans and into individual CDs. Catalyst said, ‘Look, you can put this out in million-dollar chunks or larger.’ So, instead of going out with 10 different instruments, we could go out with one. Catalyst had to convince us this was safe, secure and sound, because we didn’t understand it at the time. This was all new to us.”

Brown and his staff say that’s the approach CSS has taken for the last 30 years.

“When we started getting into Treasuries and securities, we didn’t have the expertise to do it ourselves,” said Brown. “We needed a third party to advise us how to invest in instruments that were safe. We never want to put our members’ money at risk.”

Brown and Debra Reeder, JSC’s CFO who has also been with the credit union since it began using CSS services, said CSS staff explain every move, opportunity and option thoroughly.

“They don’t try to speak over our heads,” said Brown. “They’ve been very good teachers and friends. When I call Catalyst, I don’t have to say who I am. They know,” added Reeder.

“There was a time when I knew a lot of credit union CEOs who couldn’t sleep well,” Brown said. “But I’ve always slept well, trusting the staff at Catalyst Strategic Solutions.”

Perhaps the most difficult challenge over the last three decades – the challenge keeping many credit union leaders up at night – was the Great Recession. In 2008, as many financial institutions were failing, Brown and Reeder credit CSS’s positioning and conservative approach to investing as the key to their credit union’s success.

“During the Great Recession, regulators were really looking at our portfolio because of its size,” said Brown. “They were concerned that as the Recession ended and rates started rising, institutions would find themselves in a negative earning position. But, we received nothing but praise from the regulators for the laddering of our investments.”

“That made us feel good, and it was because of the Advisory Service,” added Brown.

Brown said CSS is always “on top of” industry activities. “They’ve made transitions easy and informed us of upcoming changes,” said Brown. 

“It’s been easy to go with CSS in any particular area,” added Reeder.

As the financial landscape has evolved over the last 30 years, some principles have remained the same. “We’ve never tried to maximize profits; that’s kept us from getting into risky investments,” said Brown. “That’s been our philosophy since Day One.”

“The good thing is that Catalyst knows what won’t interest us,” said Reeder. “They know we’re conservative, so they won’t try to convince us regarding investments that make us uncomfortable.”

Reeder noted that when presenting investment opportunities, CSS approaches the credit union with multiple options. “We’ve always had three, four or five options, which makes it easier to understand the differences,” she said, “and CSS walks me through them.”

This relationship has two sides.

“Working with Mike and Debra for the last 10 years has been rewarding on many levels,” said Steven Houle, VP of Advisory Services for CSS. “The biggest reason for their sound balance sheet and long-term success has been Mike’s consistent message. The first time I spoke with Mike, he outlined the objectives for the balance sheet and investment portfolio. From that point on, Debra and I have been executing this vision. We’ve navigated through some of the most difficult economic times and challenging interest rate cycles, but Mike’s trust made our job easier. JSC is in a great position to keep flying high. I’m grateful he trusted our expertise to help them.”

“We appreciate Catalyst Strategic Solutions’ stability and have enjoyed their services for the last 30 years,” said Brown. “A lot of companies want us to switch our portfolio to them, but we’ve never been tempted.”

For more information on Catalyst Strategic Solutions, email css@catalystcorp.org or call 800.301.6196.

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