1. Protecting our Future Ideas and guidance for ensuring a sustainable future for credit unions

2. Future realities Credit union membership is aging Credit union membership is aging Credit union mergers continue Credit union mergers continue Regulatory pressure persists Regulatory pressure persists Margins grow thinner Margins grow thinner Recruiting quality volunteers is challenging Recruiting quality volunteers is challenging We must meet these challenges to survive & thrive

3. Keys to sustainability Planning Planning People People Performance Performance Products Products Pricing Pricing Partnerships Partnerships

4. Planning first Requires collection and evaluation of critical factors before developing recommendations Helps use resources (money, personnel, relationships) more effectively Serves as a communication tool Enables evaluation of progress Keeps you focused on success Your roadmap to success Your roadmap to success

5. People Recognize the need to grow young member population Recognize the need to grow young member population Staff: you get what you pay for Staff: you get what you pay for Quality volunteers are the lifeblood of the movement Quality volunteers are the lifeblood of the movement Your people should reflect your philosophy and diversity Your people should reflect your philosophy and diversity

6. Peak performance Requires an understanding of asset liability management Requires an understanding of asset liability management Reviewed regularly and in sufficient detail Reviewed regularly and in sufficient detail Must be planned to succeed Must be planned to succeed Cannot be an emotional reaction Cannot be an emotional reaction Should include contingency and disaster alternatives Should include contingency and disaster alternatives

7. Products Be the BEST at what you do! Be the BEST at what you do! Choose products with members in mind, not just the bottom line Choose products with members in mind, not just the bottom line The right products can effect demographic change The right products can effect demographic change Choose vendors with care Choose vendors with care Don’t be afraid to bargain Don’t be afraid to bargain

8. Pricing Don’t allow emotion to guide your decisions Don’t allow emotion to guide your decisions Be competitive, but not foolish Be competitive, but not foolish Your pricing decisions can act as a control for growth Your pricing decisions can act as a control for growth Understand when you need a “loss leader” Understand when you need a “loss leader”

9. Partnerships Shared ventures Shared ventures Third party vendors Third party vendors Key industry relationships Key industry relationships Mergers Mergers

10. Key industry relationships Regulators Regulators Trade associations Trade associations Leagues Leagues Chapters Chapters Special interest organizations Special interest organizations Other key relationships Other key relationships

11. Shared ventures Shared branching model Shared branching model Lending service groups Lending service groups Accounting Accounting Marketing and public relations Marketing and public relations Business contingency Business contingency Human resources Human resources Training and development Training and development

12. Third party vendors Do your homework Do your homework Consider their past performance Consider their past performance Contact references Contact references Consider your future plans Consider your future plans Don’t pay for more than you need Don’t pay for more than you need

13. Mergers Rational reasons for merger Rational reasons for merger Benefits of merging Benefits of merging Challenges of mergers Challenges of mergers Merger strategies Merger strategies Things you need to know Things you need to know Guiding principles Guiding principles

14. Why merge? Economies of scale Economies of scale Elimination of competitive dilemmas Elimination of competitive dilemmas Reduction of regulatory pressure Reduction of regulatory pressure More and better services More and better services Increased capability to survive Increased capability to survive Job security or enhanced benefits for credit union staff Job security or enhanced benefits for credit union staff

15. Merger challenges The end of a vision The end of a vision Cultural and philosophical differences Cultural and philosophical differences Loss of control through elimination of board positions Loss of control through elimination of board positions Bigger is more threatening to outsiders Bigger is more threatening to outsiders Loss of personal touch Loss of personal touch Differences in policies may adversely impact members or classes of members Differences in policies may adversely impact members or classes of members Excess or unusable fixed assets Excess or unusable fixed assets Negative impact on performance ratios Negative impact on performance ratios

16. Merger strategies “What if” dialogue between interested officials of both credit unions “What if” dialogue between interested officials of both credit unions Regulatory pressure on a marginally performing credit union Regulatory pressure on a marginally performing credit union Predatory approach by aggressive credit union Predatory approach by aggressive credit union Cooperative and meaningful evaluation of potential benefits by both credit unions Cooperative and meaningful evaluation of potential benefits by both credit unions

17. What’s your policy? Mergers or merging is not an option Mergers or merging is not an option Mergers are our way of growing Mergers are our way of growing We consider but don’t seek out mergers We consider but don’t seek out mergers We actively seek merger partners We actively seek merger partners Prudent boards should have a unified, carefully considered strategy to effectively address mergers.

18. Our future: Is it worth the effort? Would it matter if your credit union went away tomorrow? Would it matter if your credit union went away tomorrow? Where would your members find service? Where would your members find service? Would the financial services your members need go away? Would the financial services your members need go away?