Growing Loans in a Competitive Environment

1. Growing Loans in a Competitive Environment Sam Crane, CEO Grand County Credit Union September 14, 2012 Utah’s Credit Unions

2. Marketing for Loan Success We have to get up every day and put on our armor. Battle for loans against fierce competitors. Battle against the odds of high delinquencies and charge offs. Battle against examiners and ever changing regulations. Battle for your members!

3. Specific Marketing Plan • Define your budget. • 8-10 different promotions throughout the year. • What return do you expect on each promotion? • Clearly define the ways you will promote. • Execute, Execute, Execute!!!!!!

4. Loan Promotion Ideas • What do my members want? • Being small can be better. • Strategic Alliances – Dealerships Re-Built • Stop paying reserves – pay members instead. • Loan Recapture – Do it yourself! – Experian • Loan Sale during high buying times.

5. “ It is the obligation of any banker to turn a profit in order to protect our depositors money.” -Mariner Eccles, CEO First Security Corporation 1933

6. Effective Pricing Accurate, Effective Pricing Requires: Identification of core costs Identification of risk pools Application of costs to pricing Strategies to balance loan and share rates Ongoing validation of the model

7. Identifying and Applying Costs with Loans Perform regular and complete cost analysis Cost of Funds Processing/Maintenance Collections Charge-offs Assure all loan grades and types are contributing equitably Eliminate Cross-Grade Subsidies

8. Risk Based Cost Breakout

9. Risk Based Margin Margin above Total costs is the Actual Return

10. Credit Union Case Study

11. Credit Union Case Study

12. Re-pricing Impacts