Published in: CFO Council

Regardless of asset size, successful credit unions share common factors. Recognizing, understanding, and managing each of these factors is necessary to reach financial goals. ALM First recognizes six factors, or levers, of high performing institutions: capital, pricing, funding, management, risk, and profit. By understanding how to strategically push down or pull back combinations of these levers can help a credit union optimize balance sheet profitability.


Regulatory and dual-capital mandates push credit unions toward holding a sufficient allocation of capital. Capital must always account for the institution’s allowance for loan loss, and capital must also suffice in covering any additional expected or unexpected losses. Capital plays a key role, too, in reducing systemic risk and protecting depositors’ and insurance funds.

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