Kathy Garner appreciates the level of confidence credit unions placed in Catalyst Corporate FCU during the capitalization process. One year after taking the reins as president and chief executive officer of the then six-month-old Catalyst Corporate, Garner says member credit unions now can see evidence of a solid, sustainable business model that drives the corporate’s operations.
“Looking back, Catalyst Corporate had a lot to prove a year ago. When we asked credit unions to trust us with their capital, we made a lot of commitments. We have kept each of those commitments,” Garner said.
The primary commitment Garner was referring to was meeting all financial regulatory requirements while operating a smaller, conservative balance sheet. However, the corporate made additional assurances in its pre-launch business plan, she said, that included: establishing a board of directors and committees that are diversified in asset size and geography, maintaining a full complement of services (and the ability to add new services/enhancements), retaining lines of credit and maintaining high levels of service, all without significant changes to fees or rates.
“When I came on board a year ago, my first responsibility was to ensure that Catalyst Corporate was operating safely and soundly by executing the business plan that was presented to capitalizing credit unions,” Garner said. “The Catalyst Corporate team has done that, meeting or exceeding all regulatory capital requirements, including retained earnings, prior to NCUA’s deadlines.”
Garner said Catalyst Corporate’s retained earnings ratio at December 31, 2012, was .84 percent, compared to the .45 percent that NCUA will require corporate credit unions to meet by October 2013. While not regulated by NCUA, another metric that Catalyst Corporate tracks is a “coverage” ratio that measures the percentage of the corporate’s expenses covered by fee income.
“The coverage ratio is an important measure of internal efficiency,” Garner said. “Our ability to cover expenses through fee income means less reliance on balance sheet activity for income and reduced exposure to risk. Catalyst Corporate’s coverage ratio generally ranges between 75 and 85 percent.”
Financial transparency has been a hallmark of Garner’s first year as chief executive – a task achieved through frequent and varied communications with members. In addition to its traditional member communications, under Garner’s leadership, the corporate introduced a regular member update from the CEO, stepped up senior management’s in-person contact with credit unions and incorporated new processes for obtaining member feedback, such as its Catalyst Councils and member surveys.
Garner said a good example of a service that resulted from a member recommendation is Catalyst Corporate’s quarterly Due Diligence Report, which pulls together all of Catalyst Corporate’s financial statements and supporting documentation in one location. “Whether you’re a member credit union looking to compile a board report or a non-member credit union evaluating Catalyst Corporate’s performance, you can find all the information you need on our due diligence web page,” she said.
If anything, Garner’s first year at Catalyst Corporate could be labeled a year of integration. Following on the heels of the merger between its own legacy corporates, Catalyst Corporate completed successful consolidations with both Western Bridge Corporate Federal Credit Union and First Corporate Credit Union. Garner said tight timeframes made for an intense year, but the broader membership base will benefit all.
“The integrations made a solid business plan even stronger,” Garner said. “Aggregating larger numbers of credit unions gives us the ability to provide services at a lower cost per credit union. It also provides the momentum to channel resources into ongoing research and development for new services and product enhancements in the future, such as the mobile banking program we introduced a year ago.”
“The Western Bridge and FirstCorp consolidations, which were finalized only four months apart, required intense focus on the part of staff,” Garner said. “Despite the added workload, the Catalyst Corporate team was able to maintain its high level of service to existing members, as evidenced by the excellent Net Promoter Score (a gauge of customer satisfaction) received on the member survey last summer.” Catalyst Corporate also received high marks from Western Bridge and FirstCorp new member evaluations, according to Garner.
The two integrations have extended Catalyst Corporate’s footprint to almost 1,300 credit unions coast-to-coast across 21 states and have brought the organization into relationships with 11 different credit union leagues – relationships Garner does not take for granted. “The state credit union leagues provided a great deal of encouragement and support during the capitalization and integration efforts. We generally serve the same memberships as the leagues, have many of the same goals and consider them to be among our closest partners.”
With a steady financial footing in place, strengthened by the integrations with Western Bridge and FirstCorp, Kathy Garner said the organization is poised to continue on its current path, adding services when they will benefit members.
“We will not try to be everything to everybody, but will stick to our core competencies, and do what we do well,” Garner said. “What drives me personally is doing what’s right for the member, and I believe the Catalyst Corporate team as a whole has the same philosophy. They had to pull together over the past year to perform some pretty challenging tasks. Accomplishing those tasks, while meeting our financial goals, maintaining our member service levels and introducing new products and service enhancements is energizing.”