Insights from Catalyst

When liquidity tightens, credit unions begin hearing recommendations to perform a core deposit study or deposit analysis, but executives may wonder how much value they add. Value derived from a core deposit study is directly proportional to the way your credit union manages the balance sheet.

Subordinated debt usage has exploded over recent years. Since the end of 2017, total outstanding subordinated debt has increased from $223.5 million to over $3.6 billion.

Credit unions are an essential part of the financial services sector, serving millions of people around the world. Therefore, it is crucial they operate with the highest level of accuracy to make sound business decisions and provide the best possible services to their members.

As 2023 unfolds, credit unions remain focused on expansion and growth, even though liquidity has tightened, and share growth has slowed. While near-term growth may be difficult to achieve, market indications suggest that share growth will rebound later in 2023 or early 2024.

Since the Fed began increasing the fed funds rate 11 months ago, credit unions across the country have been heavily impacted by the rapid ascent of interest rates. Credit unions experienced some benefits to the rise in rates, but challenges emerged as well. Therefore, it is no surprise that interest rate risk (IRR) tops the list of NCUA’s 2023 Supervisory Priorities.