Symposium Daily Wrap-Up 2018
Symposium - Day 1 - The Kickoff
The symposium kicked off with four pre-con sessions, Alloya’s Annual Meeting and then a memorable member reception and dinner out at Ditka’s (Mike Ditka’s restaurant) where Coach Ditka was gracious enough to mingle with attendees and say a few words leading up to his keynote presentation the next morning.
1. Making Your ALM Program Work for You
James Mathews, Balance Sheet Solutions “Don’t wait until you have the risk to model the risk!” – J. Mathews
Components of your ALM program:
- Market risk
- Earnings at risk
- Stress testing
- Measurement systems
- Risk management
So, what is the payoff for all this work? What is in it for me and my credit union?
- A robust ALM program produces tangible benefits for your credit union
- Keep your ALM program relevant to your credit union
- Be proactive with your ALM program
- Understand the types of risk on your balance sheet and model these risks
2. Employee Engagement: Inspiring Commitment, Passion and Loyalty in the Workplace
Diane Overgard, 45 Degrees Coaching, Inc.
“How to build organizational culture? Get your company thinking about one thing – and that’s engagement. If your teams are doing work that is innovative – then there is no way they will be disengaged.” – D. Overgard
Building Organizational Culture:
- Basic Needs
- The environment, tools, and procedures give employees clarity and pride in their job.
- Taking notice with appreciation.
- Connections that work well together.
- Personal Growth
- Stemming from a culture of trust where employees experiment to contribute their best.
3. Commercial Services for Executives
Larry Middleman and Mike Smith, CU Business Group
Follow trends and manage risk…
- Manage risks associated with commercial loans and commercial deposits
- Identify portfolio risks and risk layering
- Report loan concentrations
- Develop effective program oversight through reporting
- MBL regulations now place risk parameters in your hands
- Important to understand the “why” behind risk tolerances and to defend these to examiners
- Personal guarantees are the biggest variable
- Reporting and performance of loans with exceptions is critical
Key focus areas included understanding your market economics and how to utilize risk ratings, which can help senior managers and board members assess trends and manage risk. “Don’t tie your hands too tight by using a strict scoring/interest rate formula; you need to have flexibility to be competitive.” – L. Middleman
4. Alternative Funding Strategies
Darren Fago, Balance Sheet Solutions, LLC and Chris Lewis, Primary Financial
- Security Sale: analyze best candidate (TRR, T+2, etc.)
- Certificate Issuance: term decision, market analysis
- FHLB Term Advance: term decision, funds transfer, stock, etc.
- Loan Participations: preplanning, contracts, data files
So, how do you choose the right option for your credit union? Look at the following:
- Market Yield: Quantify the true cost to the institution. Whether it is selling an asset or acquiring a new liability.
- Total Rate of Return Analysis: Allows you to easily quantify instruments that have dissimilar cash flows.
Also, consider SimpliCD Issuance: SimpliCD Issuance provides a primary source of liquidity to credit unions by issuing federally insured share certificates to other credit unions.
“Culture is not a sprint, it is a marathon,” Todd Adams, Alloya’s Chief Executive Officer. During the Annual Meeting, Todd shared recent successes and go forward plans for the corporate, including initiatives to help staff grow, and a continued four year Member Survey score of 4.7/5.0.
At the meeting, Floyd Rummel, CEO of Northern Hills FCU was announced the new Chair of the Board. Congratulations Floyd – and thank you, Leanne McGuinness for your leadership the past three years! (Note: We are fortunate to have Leanne remain on the Board. Complete list of Board Members.)
Symposium – Day 2 – 1st and 10…
Day two of the symposium began with the Corporate Update from Todd Adams. Todd told a record symposium crowd of 184 credit union leaders from 137 credit unions, representing 5.6 million members across 17 states, supporting 15,000 professional credit union jobs that Alloya’s financial performance is on target and that Alloya is building for the future by adding new capabilities to help make the operational lives of members easier. To that end, Todd introduced Premier Portfolio, a new daily investment portal offered by Balance Sheet Solutions, LLC (Alloya’s wholly owned CUSO). Premier Portfolio will be accessible by single a sign-on through the corporate’s daily transaction portal, Premier View. Credit unions will have the ability to, all in one location, read Daily Commentary and Weekly Relative Value, view current rates, view portfolio holdings, access documents and reports and view and buy offerings.
Keynote Speaker: Mike Ditka
“Having goals/ambition is the most important thing. Without that… you have nothing.”
– M. Ditka
Years removed from his days as a tough minded head coach of the Chicago Bears, leading his team to victory at Super Bowl XX; and even more time away from his playing days, when he garnered the nickname of “Iron Mike” – Mike Ditka still has the authoritative command and respect from an audience that anxiously waited to hear the Coach share his experiences from both on and off the football field.
Mike’s stories about football, family and business were inspiring and focused on what he referred to as “A.C.E.” Attitude – “You can’t achieve anything with a bad attitude.” Character – “Not only knowing what is right but doing what is right.” Enthusiasm – “Get excited about your opportunities.”
During Q&A session with Tim Bruculere, Alloya’s Senior Vice President of Membership, Mike was asked to recite a poem titled “The Guy in the Glass” (to the right), which sums up Mike’s philosophy of leadership – taking accountability for yourself.
The Guy in the Glass
When you get what you want in your struggle for pelf,
And the world makes you King for a day,
Then go to the mirror and look at yourself,
And see what that guy has to say.
For it isn't your Father, or Mother, or Wife,
Who judgement upon you must pass.
The feller whose verdict counts most in your life
Is the guy staring back from the glass
He's the feller to please, never mind all the rest,
For he's with you clear up to the end,
And you've passed your most dangerous, difficult test
If the guy in the glass is your friend.
You may be like Jack Horner and "chisel" a plum,
And think you're a wonderful guy,
But the man in the glass says you're only a bum
If you can't look him straight in the eye.
You can fool the whole world down the pathway of years
And get pats on the back as you pass,
But your final reward will be heartaches and tears
If you've cheated the guy in the glass.
- Dale Wimbrow, (c) 1934
Becoming Digital: Welcome to the Whole New World of Financial Services
Mark Sievewright, Sievewright & Associates
What are the strategic issues credit unions are wrestling with?
- Accelerating consolidation and business model change
- Technology is redefining financial services
Mark discussed “what’s next?” for credit unions by looking at analytics, biometrics, back-office, artificial intelligence and the internet of things. He shared that based on recent research, on average, a U.S. smartphone owner spends five hours online each day.
Communication Playbook: A Business Leader’s Guide for Tough Conversations
Diane Overgard, 45 Degrees Coaching, Inc.
“I know you believe you understand what you think I said, but I’m not sure you realize that what you heard is not what I meant.” - Pentagon Spokesman, Robert McCloskey
Keys to Communication:
- Listening doesn’t mean agreeing
- Listen for more than words
- Listen for a connection
- Why does he/she care so much?
- Why do I care so much?
- Ask a Good Question
- Good questions are thought-provoking, inspire innovation and invite collaboration
Opportunities & Challenges in a Changing Environment
Jay Johnson, Callahan & Associates
“With the recent success seen in growth of credit union membership, comes new challenges.” – J. Johnson
How is 2018 going for your credit union? To help answer this question, Jay highlighted the following topics:
- Credit union challenges
Jay ended with a profound quote from Ed Callahan (founder of Callahan and Assoc.) that reminds us of the importance of the credit union mission: “Credit unions are different and always have been. We never came together with the notion of making money, but with the notion of helping people and improving their lives.”
Ultimate CECL Study
Rachel Messick, Visible Equity
Current Expected Credit Loss (CECL) is a new accounting standard that is altering how credit unions (and other financial institutions) account for expected losses.
During her session, Rachel used real examples to discuss the five common CECL methodologies including Static Pool, Loss Migration, Vintage, Probability of Default and Discounted Cash Flow with Probability of Default.
A few takeaways:
- Low incidence of charge-offs makes loss rate methods more volatile
- Collateral recovery rates really matter
- Raw vintage or static pool rates without proper adjustment may be too conservative
Real Leaders Share Their Popcorn
“Popcorn is priceless to me,” said Sam Glenn. “For me, popcorn is a metaphor for greatness – and we all have uniqueness/greatness within us. And when you share your popcorn, you share the best of yourself.”
Returning for his second year, Sam entertained attendees with his unique brand of humor, story-telling and artistic talent – painting an eagle – to drive home his belief that it all starts with your enthusiasm or “rah-rah.”
So, how do you generate rah-rah? Be an example of it. Enthusiasm is a choice. Sam challenged attendees to think about simplifying your mission/vision statement to one word and asked: “If you asked your employees to describe your company in one word – what would that word be?”
Michele Walczak, Manager from Kaleida Health FCU (Buffalo, NY)
“The symposium is not something we budgeted for. So, I jumped at the opportunity to apply for the CMG Scholarship with the hope of attending (Christine M. Gross Scholarship). I am thrilled that I won, because it afforded me the opportunity to attend this fantastic credit union event.”
“What a healthy environment this is! From the beneficial sessions, meeting Alloya staff that I’ve interacted with on the phone and the networking with credit union peers – I already feel like I’ve gained more than I thought possible by being here. I was hoping to meet with leaders from similar credit unions as mine to discuss strategic approaches and I’ve met so many here that have shared their experiences with running a credit union and I am planning on connecting with them in the future. I’m amazed at credit union people and the domino effect of sharing. This is a real cooperative at work!”
Symposium – Day 3 – 4th and Goal…
The 2018 symposium concluded with an energetic morning of differing market/economic views from Tom Slefinger, Senior Vice President, of Institutional Fixed Income Sales, Balance Sheet Solutions; and Steven Rick, Chief Economist, CUNA Mutual. After their individual presentations, Tom and Steven participated in lively debate (Dueling Market Views) moderated by Tim Bruculere. With plenty of audience participation, both Steven Rick and Tom Slefinger discussed/debated a variety of topics, including employment, the likelihood of a recession and the current political landscape.