2015 Product Cost Summary for Credit Unions ($195)

Industry Cost Averages

Kohl Advisory Group has compiled the 2015 Product Cost Summary for Credit Unions which contains cost averages by major cost element based on the actual experience of 14 credit unions. Each of these clients received a comprehensive (3-6 month) Activity-Based Assessment of its Balance Sheet Products. Evaluation dates ranged from September, 2014 through September 2015. The supporting detail for these average cost figures, by major cost element and participating credit union, are also provided in this highly informative 85-page document.

Lending products addressed in the 2015 Product Cost Summary include: Non-Awards Credit Cards; Awards Credit Cards; Signature Loans; Unsecured Lines of Credit; New Vehicle Loans (Direct); Used Vehicle Loans (Direct); New Vehicle Loans (Indirect); Used Vehicle Loans (Indirect); Real Estate Secured Business Loans; HELOCís; 2nd Mortgages Fixed; 1st Mortgages (Variable Rate) and 1st Mortgages (Fixed Rate). Deposit products addressed include: Regular Checking, High Balance Checking, Business Checking, Regular Shares, IRA Shares, Money Market Accounts, Regular CDís and IRA CD's.

Lending Product Activities and associated costs for each loan type have been developed and reported by major cost element:

  1. Direct Cost to Take Applications and Underwrite Loan (Cost per App)
  2. % of Loan Applications that Result in Booked Loans
  3. Application Cost per New Loan Booked (#1 divided by #2)
  4. Direct Cost to Complete Paperwork and Fund a new Loan
  5. Marketing and Sales Expense per New Loan Booked
  6. Total Cost to Originate a New Loan (#3 + #4 + #5)
  7. Estimated Average Life of a New Loan in Years
  8. Total Loan Origination Cost Recognized per Year (#6 divided by #7)
  9. Total Collection Cost per Year per Existing Loan
  10. Total Non-Collection Cost per Year per Existing Loan
  11. Projected Net Charge Offs per Year per Existing Loan
  12. Total Direct Cost per Year per Loan (Sum of #8 through #11)

Deposit Product Activities and associated costs for each addressed deposit product have been summarized into the following major cost elements:

  1. Transaction Related Cost per Year per Depository Account
  2. Account Support Expense per Year per Depository Account
  3. Marketing and Sales Cost per Year per Depository Account
  4. Less: Total Fees & Other Income per Year per Depository Account
  5. Average Dividend Cost per Year per Depository Account
  6. Total Direct Cost per Year per Account (Sum of #1 thru #3 less #4 divided by #5)

Results of all loans and deposit products are portrayed in chart form by major cost element. In addition to the average, the high and low ranges for each major cost element and addressed product are also presented.

Transaction Costs

The 2015 Product Cost Summary also contains average transaction costs for common deposit product transaction types. These include the cost to process an Incoming Check; a PIN Check Card Transaction; a Signature Card Transaction; an ACH Transaction; an ACH Exception; a Check Card Exception; an ATM Withdrawal; a Foreign ATM Withdrawal; an ATM Deposit; a Foreign ATM Deposit; a Teller Transaction; a Deposit Item Return; and a Bill Payment.

Satisfaction Guaranteed

The 2015 Product Cost Summary is provided on a "satisfaction guaranteed" basis. If you are not 100% satisfied, simply return the book within 5 days of receipt in lieu of paying the accompanying invoice. Order Now.

“We received substantially more than anticipated. We now have a more comprehensive Product Profitability Report, which incorporates extensive interviews with staff and contains detailed meaningful components of costs, to assist us in product profitability analysis.”

Janet Lee
Chief Financial Officer
Chevron Federal Credit Union
$1.4 billion assets

“Over the last ten years Navy Federal has used Kohlís Activity-Based Assessment to better understand and manage the cost and profitability of our products and services. In today's environment, in order to remain competitive, we strongly believe that credit unions need to understand and effectively manage what their products and services earn. Kohl's Activity-Based Assessment provided us with the tool to understand our product and service profitability.”

Joel Polster
SVP Financial Operations
Navy Federal Credit Union
$40 billion assets

“This is just the information our credit union has needed and we'll be putting it to very good use. I feel like a blind woman who's just had laser eye surgery!

Thanks again!”

Karen Rosales
Marketing & Business Dev.
Justice Federal Credit Union
$500 million assets

“Kohl Advisory Groupís "ABC Product Profitability Snapshot" not only develops cost and profitability by product, but also explains why our products cost and earn what they do. In addition Kohl provides guidance and training on how to use the accompanying software ("EZ What if" Model) to develop and test product related strategies. Our recent rollout of a member onboarding program helped us design a suite of profitable products that increase the usage and number of services acquired by members; generating revenue in areas that were loss leaders.”

Theresa Lotito-Camerino
Manager/CEO
Edge Federal Credit Union
$40 million assets