BAYTOWN, Texas, Sept. 17, 2007 (PRIME NEWSWIRE) -- Jared Cahill, National Director of Alliances for John M. Floyd & Associates, Inc. (JMFA) has been on the speaking circuit advising the credit union industry of the challenging environment and its need to find new ways to grow and stay competitive.
Over the past few weeks Cahill has traveled to industry events in Washington, Michigan, and Indiana to address credit union executives and to provide them with tangible solutions to the industry-wide shrinking of net interest margins.
Net interest margins have decreased over the past decade and last year -- for the first time in credit union history -- average net interest margins ran lower than operating expenses. To address this phenomenon Cahill believes credit unions need to grasp the new drivers of return on assets in order to compete and succeed.
Cahill stated, "In a low-margin market it is particularly important for executives to consider a variety of solutions to enhance their credit union's profitability. There are growth opportunities available for those credit unions that explore potential new areas to offset the declining net interest margin and increased operating expenses. Management efforts now will have an immediate, positive impact on a credit union's short-term performance and its long-term ability to survive and thrive."
Cahill advised credit unions that they are facing the same challenges that all financial institutions are facing across the entire financial services industry. To address the margin erosion, non-interest income has become an essential tool to maintain profitability. The new business model for credit unions to remain competitive includes a variety of methods to:
* increase non-interest income; * lower operating costs; and * grow members and product penetration.
"In order to be competitive, executives must understand the credit union's operating cost structure. Inefficiencies can't be passed on and operating costs and product pricing are not in separate silos," indicated Cahill. "These new market conditions are not an anomaly -- there is a new paradigm and credit unions that respond to the new environment will thrive."
Cahill concluded his remarks by urging participants to take the time to grasp the new drivers of return on assets in order to effectively compete and win. Alternatively, as evidenced by the increase in merger activity, Cahill commented that credit unions might be merger candidates -- especially if they don't respond to the changing environment.
Cahill joined JMFA in 2003 and is responsible for acquiring and managing alliances with financial institutions. He began his career as Vice President-Commercial Lending for MBank Dallas where he managed a $300 million commercial loan portfolio. He worked as a senior manager with Catterton, Inc. of Dallas, managing the operations and liquidation of RTC/FDIC-controlled savings and loan institutions. Cahill is a former Vice President of the Credit Union Association of New Mexico subsidiary and he also organized, chartered and managed the Saguache County Credit Union in Crestone, Colorado
About JMFA:
John M. Floyd & Associates (JMFA) is a profitability and performance improvement consulting firm and a leading provider of overdraft privilege programs serving more than 2,000 financial institutions in 49 states and Central America. JMFA is also recognized for training, account acquisition, executive placement, fraud detection solutions and earnings enhancement programs, as well as product, service, pricing and technology improvement consulting. As a direct result of our programs JMFA has helped thousands of clients dramatically improve their performance and bottom line. To learn more about JMFA please visit www.JMFA.com or call 800-809-2307.
For More Information or Interviews:
Jared Cahill, National Director of Alliances, John M. Floyd & Associates, 800-809-2307; Jared.Cahill@JMFA.com, www.JMFA.com