Article

Millennials, Mergers and Margins

Theresa Witham
Theresa Witham Photo
Managing Editor/Publisher
CUES

3 minutes

From the editor

If your credit union is looking to improve its leadership development programs or create an organization-wide succession plan, one place to start is with a young professionals group. 

“YP” groups, as they’re often called, can be informal or formal programs designed to bring your CU’s younger employees together to work on projects, share ideas across departments and network with like-minded co-workers. They also provide an opportunity for employees to build relationships and friendships at work.

$148 million Border Federal Credit Union in Del Rio, Texas, runs a group called “The Pulse” for its younger employees. While leadership development is the group’s main focus, equally important are the opportunities for community involvement it provides. Millennial employees frequently say they want a job that allows them to make a positive impact on social issues. Offering young employees a chance to develop their careers and serve the community can be a very strong recruitment and retention tool. Read more in “The Movement Within the Movement”.

Given that millennials are drawn to volunteering and serving, why are there so few younger board members?

“Millennials are out there. They want to volunteer. They want to give back to the community, but they need to be presented with the opportunity,” says James Sackett, the 2018 CUES Distinguished Director and the first millennial to serve on the board of directors at $1.3 billion Firefly Credit Union in Burnsville, Minnesota. If your CU is looking to diversify its boardroom, you won’t want to miss our profile about Sackett.

This month we also have two articles that examine how the economy and the marketplace are affecting strategy.

In “Mergers for Market Share,” Vincent Hui of Cornerstone Advisors writes about the importance of finding a complementary merger partner. “The need to seek out a merger partner that offers a good fit is a constant, but the current rate environment with its pressure on cost of funds makes this consideration even more crucial,” he explains. “A key metric in evaluating potential merger partners in this environment is a credit union’s ‘deposit beta.’”.

Reformulating CUs’ Margin Model” relates the story of FirstOntario Credit Union’s effort to reduce its reliance on interest and related income. CUES member Kelly McGiffin, CEO of the $5.4 billion CU in Stoney Creek, Ontario, delves into the state of the Canadian financial industry to explain why his credit union made this change. 

“The bottom line as I’ve studied it is: There is no foreseeable change to margin trends for Canada other than driving downward toward the levels currently held by the banks,” McGiffin writes. “And, in absolute thinking, our margins should actually be lower than those of the banks, as we will never be able to match them on a cost-of-funds basis.”

McGiffin offers plenty of lessons for U.S.-based CUs, too. Read more on p. 26.cues icon

Theresa Witham
Managing Editor/Publisher

YOUR THOUGHTS: Does your credit union have the talent needed to navigate a higher rate environment?  Email your answer to theresa@cues.org.

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