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Shareholder Profile: Allegacy Federal Credit Union
2018-06-18
Advances and Letters of Credit

June 2018 – Allegacy Federal Credit Union has achieved success as one of the top performing credit unions in North Carolina by maintaining a steadfast focus on helping its members make smart financial choices while pursuing personal goals that mean the most.

According to Cosby Davis, executive vice president and chief financial officer of Allegacy Federal Credit Union, a shared goal of helping members succeed is just one reason Allegacy enjoys a strong partnership with FHLBank Atlanta.

“As a credit union, we appreciate being a member of a cooperative, and just as we’re focused on helping our members make smart choices, we believe FHLBank Atlanta helps us make good financial choices,” said Davis.

These choices have led Allegacy to use a number of FHLBank Atlanta products to support profitability and take advantage of strategic planning workshops available exclusively through their membership.

Allegacy uses FHLBank Atlanta advances as a global hedge on the balance sheet, helping the credit union manage interest-rate risk and long-term earnings. Furthermore, advances provide an important source of liquidity, both in the absolute sense and as a contingent source to manage variations in the balance sheet.

Michelle Salvadore, senior vice president of finance at Allegacy, points to the institutor’s large home equity line of credit portfolio as an asset class that can require on-demand liquidity availability.

“Our borrowing capacity at FHLBank Atlanta gives us peace of mind that if these home equity lines are drawn on, we can quickly access liquidity if needed,” said Salvadore.

In addition to advances, Allegacy recently began using FHLBank Atlanta’s letter of credit product. Davis says that the he first learned about the letter of credit at FHLBank Atlanta’s Annual Member Conference and grew more interested after discussions with their relationship manager. Allegacy is currently using the letter of credit to guarantee insurance premiums, leveraging the strength of FHLBank Atlanta’s credit rating to back the letter of credit.

“The letter of credit is a product that our FHLBank Atlanta relationship manager brought to us, explaining how it worked and helping us identify an opportunity,” said Davis. “We appreciate the fact that the Bank brings ideas to us.”

Beyond financial products, Allegacy has taken advantage of educational opportunities offered by FHLBank Atlanta, including a strategy workshop designed specifically for credit unions. Davis notes that this session was particularly valuable because of the opportunity to share ideas with other credit union executives, the important takeaways related to new products Allegacy could offer its members, and the strategies they developed for operating the business more profitably.

FHLBank Atlanta’s commitment to its credit union members through this type of strategic counsel and its broad product portfolio fosters a relationship with Allegacy that Davis describes as “phenomenal.”

“Our trust with FHLBank Atlanta is very important and it is clear that they care about our success,” said Davis. “We are happy to do business with people who have our best interests in mind.”

 

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