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Lufkin FCU Stands Out in CU Times in Non-Interest Income
Tuesday, February 17, 2015 6:55 AM

Lufkin FCU Chart

Three small Cornerstone credit unions were named in a recent CU Times article regarding non-interest income and the difference it can make for the bottom lines of small financial institutions.

According to data analyzed by Callahan and Associates for CU Times, an accounting change in the handling of interchange fees helped $31.5 million Lufkin Federal Credit Union grow non-interest and other income (as defined on NCUA's 5300 Call reports) by 141.77 percent through June 30, 2014.

The institution's first-time implementation of a courtesy pay program fueled the majority of that growth.

Lufkin FCU was among the top 10 institutions nationwide to make the greatest gains in non-interest income growth on a percentage basis, according to data from Callahan.

All 10 credit unions in the category were relatively small institutions ranging in size from the $116 million Santa Fe Federal Credit Union, based in Amarillo, Texas, in the top slot with 235.53 percent growth, to City Co, the smallest on the list, which ranked eighth on the noninterest income leader list.

The courtesy pay program, newly installed in 2014, was a key growth driver for Lufkin, according to president/CEO Julianne Slusher, the credit union's former COO who assumed her new post in January 2014.

Like most courtesy pay programs, members who subscribe to the program are covered if their checking accounts stray into negative numbers. At Lufkin, members can carry up to a $400 deficit for up to 30 days under the program, which costs them $25 each time they have to use it.

Slusher was quick to point out that they will not incur additional charges from creditors for bounced checks, and there is no charge if they don't use the program. "We have a lot of blue-collar workers who struggle with every flat tire or burst water heater," she said. "This program can cover them from paycheck to paycheck."

According to CU Times, Slusher declined to disclose how many of the credit union's 4,700 members take advantage of courtesy pay, but did say Lufkin earned $360,000 from the program in 2014. "The members love it," she added.

Lufkin also realized a windfall of $107,000 paid by CUNA Mutual Group's experience refund program last February for having very few claims during the previous year. The amount is nearly four times the $29,000 the credit union received the prior year, she noted.

"We can control the policies, but not the claims," Slusher said. "It just so happened we didn't have very many claims that year."

Slusher was one of six credit union employees who occupied new positions after former President/CEO Linda Smith retired in January 2014. Slusher said the increase in non-interest income funds allowed many of them to participate in training opportunities and travel to credit union conferences.