Understanding and anticipating deposit account behavior is a valuable planning tool, typically reviewed by financial institutions under a variety of economic and interest rate environments.

Deposits at the $29.1 billion State Employees' Credit Union in Raleigh, N.C., are long-lived and are a stable, reliable source of funding for the cooperative, according to a study by independent consulting firm KPMG.

The study evaluated SECU deposits in the categories of rate-reaction or sensitivity of SECU rate offerings to market interest rates, maturity or how long, on average, deposits stay on the credit union's balance sheet, and growth and decay, which are the degrees that depositors increase or decrease the balance of their accounts at SECU as market rates change. 

KPMG tapped 12 years of SECU data from 2002 to 2014 to assess stability in deposits at the credit union, according to SECU CFO Mike Lord.

“Our members, recognizing the value of their cooperative, have exhibited their commitment to SECU throughout the years by consistently bringing their deposits to the credit union,” Lord said.

He added, “Deposit balances are 'long lived' and not subject to significant changes when market interest rates experience fluctuations, similar to rate movements over the past 12 years which included periods of falling, rising and flat interest rates, as well as recessions, periods of economic growth and decline.”

According to the KPMG study, SECU deposit rates are only moderately sensitive to the changes in market interest rates and its deposits are very stable and not prone to significant decline through all rate cycles and “with average lives that range from 4.2 years to 22.2 years over the entire time frame.”

“The money market share account [which is the savings account most used by SECU members] has an average life span of 14.4 years to 17.8 years,” the KPMG  report continued. “The long deposit lives reflect that deposits are a reliable and very stable source of funding for SECU.”

The credit union said it pursued independent evaluations from firms like KPMG in preparation for revised NCUA capital requirements and stress tests for larger credit union slated for February 2015.

SECU had previously contracted with Washington-based Promontory Financial Group for help in developing a new capital plan.