Understanding and anticipating deposit account behavior is avaluable planning tool, typically reviewed by financialinstitutions under a variety of economic and interest rateenvironments.

Deposits at the $29.1 billion State Employees' Credit Union in Raleigh, N.C., are long-livedand are a stable, reliable source of funding for the cooperative,according to a study by independent consulting firm KPMG.

The study evaluated SECU deposits in the categories ofrate-reaction or sensitivity of SECU rate offerings to marketinterest rates, maturity or how long, on average, deposits stay onthe credit union's balance sheet, and growth and decay,which are the degrees that depositors increase or decrease thebalance of their accounts at SECU as market rates change.

KPMG tapped 12 years of SECUdata from 2002 to 2014 to assess stability in deposits at thecredit union, according to SECU CFO Mike Lord.

“Our members, recognizing the value of their cooperative, haveexhibited their commitment to SECU throughout the years byconsistently bringing their deposits to the credit union,” Lordsaid.

He added, “Deposit balances are 'long lived' and not subject tosignificant changes when market interest rates experiencefluctuations, similar to rate movements over the past 12 yearswhich included periods of falling, rising and flat interest rates,as well as recessions, periods of economic growth and decline.”

According to the KPMG study, SECU deposit rates are onlymoderately sensitive to the changes in market interest rates andits deposits are very stable and not prone to significant declinethrough all rate cycles and “with average lives that range from 4.2years to 22.2 years over the entire time frame.”

“The money market share account [which is the savings accountmost used by SECU members] has an average life span of 14.4 yearsto 17.8 years,” the KPMG report continued. “The long depositlives reflect that deposits are a reliable and very stable sourceof funding for SECU.”

The credit union said it pursued independentevaluations from firms like KPMG in preparation for revisedNCUA capital requirements and stress tests for larger credit unionslated for February 2015.

SECU had previously contracted with Washington-basedPromontory Financial Group for help in developing a new capitalplan.