How much capital is enough?
Use a blend of instinct, math, and analysis to determine the right level of net worth.
Adam Johnson
When determining your optimal net-worth ratio, aim for the “roughly right” amount, says Adam Johnson, CEO/principal at c. myers corp.
“There’s no one right amount for everyone,” says Johnson, who addressed the CUNA Finance Council Virtual Conference Collection.
Achieving the right capital level is becoming “a bigger balancing act” between the need to build or conserve net worth versus using capital to deploy initiatives that may lead to long-term growth, he says.
Many credit unions struggle to grow capital due to increased deposits, lower earnings, greater demands for capital, and the need to meet rising consumer expectations and operate in a highly competitive environment, Johnson says.
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