One year after taking the reins as president/CEO of the then six-month-old Catalyst Corporate FCU, Kathy Garner said her 1,500 member credit unions can now 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,” Garner said Monday in a release from the Plano, Texas-based corporate. “When we asked credit unions to trust us with their capital, we made a lot of commitments.”
The $2.7 billion corporate has made good on those promises, Garner said. First, Catalyst met regulatory requirements while operating a smaller, conservative balance sheet. Additionally, Catalyst assured its members in its pre-launch business plan that it would establish a board of directors and committees that are diversified in asset size and geography; maintain a full complement of services, with the ability to add new services and enhancements; and, retaining lines of credit and maintaining high levels of service. And, the corporate promised to do it all without significant changes to fees or rates, Garner said.
Catalyst Corporate's retained earnings ratio at Dec. 31, 2012, was 0.84%, already exceeding the 0.45% that the NCUA will require corporate credit unions to meet by October 2013.
Catalyst Corporate also tracks its “coverage ratio,” which 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%.”
Garner said she also placed emphasis on transparency during her first year as Catalyst CEO. In addition to 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 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.
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. Catalyst Corporate also received high marks from Western Bridge and FirstCorp new member evaluations, the corporate said.
Garner said tight merger 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.”
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