A financial plan is literally the foundation of organization success. If the mission, vision, values and strategy of a credit union are not aligned with, and supported by a viable financial plan, then like a structure built on a weak or shifting foundation, it will crumble.

The financial analysis starts with a member value assessment. Rather than a flawed approach of using asset size as peer group determinant, operating expense is used instead. This allows us to answer the ultimate question of success for your credit union and its members: Given what we spend on operations each year, what are we getting relative to others who make a similar investment.

The dilemma every credit union faces is where to “set the bar” relative to return on assets (ROA). Too much ROA and the credit union is extracting profit from its members and hoarding it as capital. Too little ROA and the credit union will fail to stay adequately capitalized. The second step of the financial analysis is to establish ROA, credit loss and efficiency ratio targets necessary to fulfill the credit union mission. This quantitative approach eliminates guesswork and removes emotion from the process; it provides a clear sense of direction for the board and management team to focus upon.

The financial services industry is balance sheet (not income statement) driven, capital constrained and laden with fixed costs. Because of this, it is not possible to “pivot on a dime” like other industries. Successful organizations take a long time to build, but they are hard to tear down. Based upon performance trends over the prior three years, a series of measured and deliberate strategic considerations are presented to facilitate discussion about how to tactically fulfill the ROA and efficiency ratio requirements going forward.

The financial plan should not be one that is “handed over” to the credit union for implementation, it should be one that can be tweaked and tailored. As part of the deliverable, an Excel-based module is provided that will allow the credit union to take the preliminary set of strategic considerations and run what-if scenarios, make adjustments and modify the plan to best fit their needs. As the strategic considerations are modified, a real-time, 36 month budget is being updated in the background. Once finalized, the credit union will be able to produce a “down to the month” plan spanning the upcoming three years.


  • Member Value Assessment (PDF Format)
  • Evaluation of Current Business Model (PDF Format)
  • Preliminary Strategic Considerations (PDF Format)
  • Three Year Financial Plan (PDF Format and Excel-based module)
  • Direct consultation to review reports and modify preliminary three year plan (webinar format or on-site).
  • Follow-up “support” is included to answer questions about the Excel-based planning module.


 Conducted by  Mike Higgins, Jr.

Conducted by Mike Higgins, Jr.