TCT: More Services Than You Think

As I speak with CEOs of those credit unions who are associated with Thompson Consulting and Training (TCT), as well as our strategic allies, I find not all are aware of the full cadre of services TCT offers.

These services complement one another and usually it benefits a credit union to use more than one of the management tools and services provided by TCT.

We have seen credit unions add as much as 75 basis points to their ROA by using TCT services. I thought it might be beneficial to briefly describe some of the more popular management tools and services provided by TCT.

Risk Based Loan Pricing (RBL)

This management tool uses statistically derived methods to accurately price loans according to the unique risk each borrower poses based on credit scores.

TCT’s RBL is one of few tools that take into account all costs incurred by an individual credit union relative to making loans for each credit grade.

TCT’s RBL allows “reaching deeper” into the loan market and assures loans are priced profitably according to operating costs and risk.

Deposit Pricing

TCT provides a stochastically derived model to set deposit rates.

This method assures rates are set according to loan demand and other factors.

By using empirical methods, interest margin is maximized, the emotional factor so common in setting rates is removed, and profitability is more attainable.

Credit Migration (CM)

TCT’s Credit Migration is one of the most accurate and concise statistically derived loan risk management tools available to credit unions at a price no competitor can match.

Among the benefits of CM is the ability to track loans individually and categorically as they improve or digress in credit quality.

Problem loans are identified long before any other reporting methods are able. Another benefit of TCT’s CM is the ability to assure ALLL placements meet regulatory requirements and accurately reflect potential loan losses.

Asset Liability Management Modeling (ALM)

TCT’s ALM tool is unique in that it focuses on Earnings (Equity) at Risk (EAR)as opposed to traditional ALM models that employ Net Equity Value (NEV).

Students of NEV are aware of the weaknesses this method poses as a process to assess how interest rate changes might impact a credit union.

EAR is a far better method for forecasting how earnings/equity will be impacted when interest rates shift in one direction or another.

Delinquent Loan Tracking Report (DLT)

Few financial institutions track movement of individual past due loans from one “aging silo” to another.

Management benefits from knowing which individual delinquent loans are improving or worsening month by month.

This report also provides totals for each aging silo so managers can see if the overall delinquency picture is improving or worsening and why.

This report provides a quick picture as to the performance of loan and collection staff and weaknesses in the collection process.

Strategic Planning Consultation and Training

TCT has helped credit union managers and boards with strategic planning for decades.

One determinant of a credit union’s success is its ability to set goals, describe the steps necessary to carry out long/short term plans using objective methods, and track its progress.

TCT helps managers by providing coaching and consultation as well as tracking and reporting services.

Member Business Loan Consultation and Training

The consultants at TCT have over 40 years combined experience in member business lending.

Services include business loan training, establishing business loan policy and procedures as well as helping to qualify for Small Business Administration certification.

Strategic Alliances

TCT has alliances with a number of service providers who specialize in helping credit unions succeed.

These specialists are carefully selected by TCT and have proven their ability to help credit union and bank clients reach their respective objectives.

Services provided by our strategic allies include: loan portfolio and profitability growth; loan delinquency control processes; ancillary financial services evaluation and training; and more.

About the Author
Dennis Child

Dennis Child is a 40 year veteran credit union CEO recently retired. He has been associated with TCT for 25 years. Today, Dennis enjoys providing solutions and training for credit union managers. He also uses his financial credentials and advisory skills to assist the Boomer generation plan and prepare for their retirement years. He and his wife, Geri, live in Logan, Utah. Dennis can be reached at