QuantyPhi Quarterly
A Message from the President
As we head into fall, I want to take a moment to reflect on the growing importance of risk management in today’s financial landscape and how QuantyPhi is helping credit unions rise to the challenge.
At QuantyPhi, we believe that strong balance sheets start with strong foundations. That’s why we put a strong emphasis on our validation services, especially ALM Validations and CECL Validations, to help credit unions not only meet regulatory expectations but also uncover opportunities for performance improvement. These validations are more than compliance checks, they are strategic tools that reinforce modeling integrity, sharpen assumptions, and support sound decision-making.
And our work doesn’t stop there. We are committed to working side-by-side with credit unions to optimize every corner of your balance sheet. Whether it’s refining liquidity strategies, aligning investment portfolios, or fine-tuning deposit assumptions, our team brings deep expertise and a collaborative spirit to every engagement.
We know that no two credit unions are alike. That’s why our approach is always tailored, always consultative, and always focused on helping you serve your members with confidence and clarity. Thank you for your continued partnership. We look forward to helping you build smarter, stronger, and more resilient balance sheets in the months ahead.
Adam Stone
President of QuantyPhi
Innovative Solutions for a Thriving Credit Union
CECL Validations from a CUSO you trust.
QuantyPhi's CECL Validation service is designed to ensure your credit union's compliance with the Current Expected Credit Loss (CECL) accounting standard. This comprehensive service includes a thorough review and validation of your CECL processes, helping you navigate the complexities of CECL implementation with confidence.
Drive peak performance with QuantyPhi’s ALM Validation service.
Our ALM Validation service helps credit unions fine-tune their interest rate risk process for peak performance. Our experts assess your ALM program, from policy and assumptions to model results and compliance, identifying gaps and offering actionable improvements. While examiners once drove most validations, today, more members are proactively seeking assurance that their ALM reports reflect a clear, accurate view of income and risk across the rate spectrum.
Build a strong financial foundation with QuantyPhi’s Benchmarking services.
Our Benchmarking analysis takes your ALM model results and calibrates the optimal investment portfolio structure that supports your balance sheet. Once established, your benchmark paves the way to meeting your goals not only for your investment portfolio, but also for your entire balance sheet. It enables you to make solid strategic decisions quickly and easily. It can help determine the best pathway to success.
Investing With Purpose Starts at the Source
Discover how liability-driven investment strategies can elevate your credit union’s portfolio management.
In this insightful piece, Kevin Chiappetta, SVP/Chief Education & Resource Officer, examines how aligning investment decisions with member-centric risk profiles leads to smarter, purpose-driven outcomes. He also highlights how evolving tools and real-time modeling are reshaping the future of balance sheet management. If you are intrigued by what’s ahead, contact QuantyPhi for an exclusive early look at the platform shaping the future of credit union investment strategy.
Market Commentary
Squeeze the grapes, not your margins.
By: Wade Cooper, MBA, Financial Strategist
September’s here—and so is sweater weather, packed lunchboxes, and the buzz of football games. Harvest season is in full swing, and for some, it’s time to stomp some grapes and kick off winemaking. The process is simple at heart: crush, squeeze, ferment, celebrate. Voilà! You’ve got wine on the way.
This September also brings another kind of expectation—the mid-month meeting of the Federal Open Market Committee (FOMC). Traders, economists, and financial institutions watch closely, anticipating changes in interest rates. Market predictions currently suggest the Federal Reserve may lower rates this September, with possible further reductions as the year progresses. For credit unions, these decisions hold significant consequences, influencing everything from loan pricing to overall profitability.
Should the predicted rate cuts occur, credit unions will likely face mounting pressure to lower loan rates, striving to remain competitive in a changing marketplace. Yet, this strategy brings its own challenge—a credit union’s cost of funds probably will not fall at the same rate. When loan rates decrease but funding costs remain static, profit margins get squeezed like so many grapes.
Recent history supplies a cautionary tale. Not long ago, the Fed raised interest rates 525 basis points in 16 months. These rapid interest rate hikes caught many institutions off guard. Some credit unions, eager to maintain loan volume, continued lending at rates below the risk-free rate. We also must remember the inflow of funds from the government COVID checks stopped flowing around the same time as the interest rate hikes. Mispricing loans by failing to adjust to interest rate changes, along with the spigot of government funds being turned off, became a liquidity crisis.
Looking to the months ahead, adaptability will be crucial for credit unions. If/and/or when rate cuts materialize, institutions slow to adjust will lose ground to competitors offering more attractive terms. Managers must maintain a vigilant watch over funding costs, adjusting deposit rates and CD specials to safeguard margins and a positive ROA. As of the second quarter, as an industry, cost of deposits for credit unions was 2.0%. The good news is this happens to be the highest cost of funds in the last 10 years. The same holds true for the cost of borrowing funds at over 5.0%. Which means if rates get cut, credit unions have room to cut their cost of funds as well. The bad news is, if the rate cuts progress rapidly downward, credit unions only have so much room to cut their cost of funds.
This September, go ahead and squeeze those grapes! Just don’t squeeze your financial margins. Cheers to a season of flows – wine and cash!
Getting to Know Your CUSO Team
Meet Kyle Kabara, QuantyPhi’s new Director of ALM & Investments.
We are excited to welcome Kyle Kabara to the QuantyPhi team! Kyle joined us in July 2025 as our Director of ALM & Investments, and he has already jumped right in – helping credit unions with portfolio strategy, liquidity planning, and sound financial management. A proud graduate of the University of Wisconsin – Whitewater, Kyle brings valuable experience from his time at a bankers' bank, the State of Wisconsin’s Department of Administration, and First Citizens State Bank.
What is Kyle excited about at QuantyPhi?
“I’m really excited for the launch of our new ALM model. This new product will be an excellent tool for our members to use and will have a lot of new and exciting features that will be able to assist them with their bond and loan portfolios and their overall balance sheet management.”
Life outside the office.
“Outside of work I really enjoy taking my family boating and fishing. In winter I enjoy ice fishing on many different lakes. My children are involved in several sports and other activities which have been fun to watch and coach.”
Kyle’s Favorites:
- Food: Italian
- Music: Country
- Movie: Star Wars
- Hobby: Ice Fishing
- Travel: Anywhere in the Caribbean
Events
Navigating Interest Rate Risk | Webinar Series
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Managing interest rate risk remains a key focus for credit union managers due to its significant influence on performance and risk. This webinar series addresses the challenges posed by rate uncertainty and provides practical tools and strategies for navigating a range of interest rate scenarios effectively.
QuantyPhi's monthly series features 45-minute sessions held on the third Thursday of each month at 2:00 p.m. CT. Each session will explore challenges facing credit union managers and share practical approaches to navigating today’s financial landscape.
Session highlights:
- Balance Sheet Optimization Overview: Understand the foundational process for aligning strategies with credit union goals.
- Asset Liability Management: Explore techniques for effectively managing assets and liabilities.
- Investment Portfolio Alignment: Learn how to align your investment portfolio with balance sheet objectives.
- Performance Analytics: Gain insights into measuring, monitoring, and managing risk to support informed decision-making.
- Market Insights and Strategies: Review trends, implied interest rate paths, and approaches to portfolio management for a resilient strategy.
Register today to explore actionable strategies and insights for optimizing balance sheet performance in an evolving economic environment.
Join the QuantyPhi team in 2025 to support our partners and clients at these important events:
- Covantage Care’s Fore Our Communities Golf Event
September 11 in De Pere, WI - Iowa Credit Union League’s Annual Convention
September 17 to September 19 in Dubuque, IA - Indiana Credit Union League’s Annual Meeting and Convention
October 1 to October 3 in Indianapolis, IN - Corporate Central’s Momentum 2025
October 7 to October 9 in Wisconsin Dells, WI - GoWest Association’s MAXX Convention
October 13 to October 16 in Portland, OR - Illinois Credit Union League's Annual Convention
October 23 to October 25 in Chicago, IL - America’s Credit Union’s Small Credit Union Conference
November 16 to November 18 in Kansas City, MO
Financial Reads
Are you looking for some good reading that might help you at work too?
May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases—And What We Can Do About It.
Author, Alex Edman, examines how our cognitive biases—especially confirmation bias—can lead us to misinterpret stories, statistics, and studies, and offers practical strategies to help us think more critically and make better decisions.
Better Bankers, Better Banks: Promoting Good Business through Contractual Commitment
Authors, Claire A. Hill and Richard W. Painter, explore how legal and contractual mechanisms can be used to encourage ethical behavior and long-term thinking in the banking industry.
Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy
Author, Cathy O'Neil, explores how large-scale algorithms, often used in areas like education, finance, and law enforcement, can unintentionally reinforce inequality and limit accountability. The book raises important questions about transparency, fairness, and the ethical use of data in decision-making.
For more investment reads, check out our QuantyPhi Reads selection.
Spotlight on SimpliCD
Simplify your strategy and amplify returns with SimpliCD.
SimpliCD makes it easy to turn your excess liquidity into a high yielding certificate of deposit portfolio.
With SimpliCD, your credit union can:
- Purchase multiple CDs in a single transaction with no fees
- Eliminate the need for multiple wire transfers - Corporate Central makes the transfers for you
- Receive one consolidated interest payment to your Corporate Central account
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