Jefferson Financial Federal Credit Union, Metairie, La., on Monday said it completed the first funding installment of its $12 million secondary capital plan.
The $563 million CU, which has a low-income designation, said it is the beneficiary of one of the largest secondary capital requests ever approved by the National Credit Union Administration.
Jefferson Financial FCU reported it worked with CU Capital Market Solutions, a credit union service organization based in Overland Park, Kan., to develop a secondary capital plan, prepare its NCUA application and fund the capital.
According to the two parties, the second installment of Jefferson’s secondary capital will be provided by CMS through an exclusive arrangement with the CU Secondary Capital Fund.
Mark Rosa, CEO of Jefferson Financial FCU, said the credit union plans to use the funds to expand loan and deposit growth, and increase earnings to drive future growth.
“The growth in our balance sheet allows us to upgrade the suite of products and services we provide to our members,” Rosa said in a statement.
The process of successfully applying for, securing and implementing secondary capital is “much more involved and detailed than people realize,” Rosa added.
“While low-income designated credit unions have historically had the ability to accept secondary capital, it has rarely been used as a strategic growth tool because the application and planning process is so difficult,” he explained. “However, CMS’ ‘turnkey’ approach, from application to implementation, turned a complex process into a seamless, efficient and successful endeavor.”
Lewis Lester, CEO of CU Capital Market Solutions, said consistent and reliable access to secondary capital allows the credit union movement to “thrive and keep pace with the ever-expanding needs of members.”
“Credit unions such as Jefferson Financial, which have maintained strength and performed exceptionally well for members, especially through the financial crisis, now can utilize secondary capital to fully realize their growth potential,” Lester said. “CMS is excited to lead this initiative so credit unions can accelerate the momentum they have spent years building in local markets.”