Finding the Formula: Balancing Deposit Growth and Loans in 2025

[00:00] Casey Mauldin: We’ve seen it kind of shift a little bit. There’s been lights of positivity, but it’s not enough to think that we’re going to, like I said, get back to what it used to be anytime in the near future. But we have seen some relief.

[00:16] Narrator: Welcome to 22 minutes in Lending, your go-to podcast for insights on all things lending. From lending practices, regulatory updates, how to enhance lending efforts, and more. In each episode, Vince Passione connects with industry leaders to discuss the latest trends and happenings around the lending industry. Let’s dive in to the latest in lending.

[00:39] Vince Passione: Welcome to another episode of 22 Minutes in Lending. I’m your host, Vince Passione, and today we’re joined by Casey Mauldin, the Chief Revenue Officer and Chief Lending Officer at Jovia Financial Credit Union. Casey’s dual world gives him a unique perspective on balancing member-centric lending while driving organizational growth. Under his leadership, Jovia has built an impressive loan portfolio across auto, home, personal, and commercial lending, all while staying ahead of the industry trends. Welcome Casey. It’s great to have you on the podcast.

[01:08] Casey Mauldin (01:08): Thank you, Vince. It’s great to be here.

[01:10] Vince Passione (01:10): Awesome. So let’s start with a little bit overview of Jovia, asset size, who you’re serving, what are the members’ current needs?

[01:18] Casey Mauldin: Sure, yeah. We’re currently about four and a half billion, slightly larger than that, asset size. Although we have members in every state, we primarily serve Long Island, which are Nassau and Suffolk counties.

[01:29] Vince Passione: Okay. Just curious, I was going over, I know Long Island well, where I grew up in Brooklyn, New York. I used to commute out to Long Island a great deal during my days at Citi. Who are your competitors outside of the credit union space? If you had to pick one?

[01:45] Casey Mauldin: Sure, of course you’ve got the Giants out of New York. Chase is a formidable force. You’ve also got competition locally from a community banking space that NYCB has merged into Flagstar. They’ve definitely been a little bit of the competition piece, but the biggest also, Fintechs, because they end up meeting the client we and where they want to be. They make it easy, so therefore it makes a little bit more of a challenging environment for any financial institution.

[02:15] Vince Passione: Is there a specific Fintech that you look at and say, when you’re building a product and you’re trying to make sure that your product is up to speed, that that’s the one you’re looking at?

[02:25] Casey Mauldin: Sure, there’s a few, and it really depends on the product set specifically. So like consumer unsecured loans, you look at your upgrades, your upstarts. Then when you start looking at some of the other spaces. It’s the larger commercial financial institutions. It’s how they’re able to capture those, whether it’s a mortgage or SOFI. Along those lines, what is the allure associated with it and how can I capture that on
our front utilizing the resources that we have available?

[02:54] Vince Passione: Got it. Got it. So we talked about your role. It’s kind of unique in the credit union industry that you’re both the chief revenue officer and the chief lending officer, and you sort of have an interesting balance. We were talking about it before we started recording, right? You’ve got this role of driving loan growth, at the same time you’re looking at organizational growth, you’re looking at deposit growth at the same time, at a time when some credit unions are actually creating a chief lending officer and then a chief deposit officer. So talk to us about the opportunities in that, and this is the first time that Jovia has done that. Then how do you balance the two?

[03:31] Casey Mauldin: Sure. I can’t speak in the past what Jovia has done from a revenue and a lending role, but I’ve definitely heard this one before. My role is about establishing healthy balance on both sides of the balance sheet. Ultimately, in the end, it’s about setting realistic expectations, establishing accountability, and therefore achieving results. Which usually starts early in the strategic planning phase, then formalizes through the business planning process, and ultimately implementation. It is then up to the leadership and everyone else around to successfully deliver that message to the team and therefore establish those expectations to see it going forward.

[04:13] Vince Passione: So Casey, when I look at deposit growth, very significant deposit growth, industry is seeing cost of funds go up pretty significantly. Almost 63% say in the last 12 to 18 months. Doesn’t look like it’s ever going to go back down to 25 to 50 basis points. So A, what’s your forecast on this, on where cost of funds will be? How do you deal with it? Then lastly, some unique things that you’ve done at Jovia to drive deposit growth and balance between things like CDs versus share accounts.

[04:47] Casey Mauldin: In a little bit of background, the area that we serve in Long Island, Nassau Suffolk Counties, if you pull any of the data reports, you’ll see these are the thinnest margins in the country. The primary reason is the competition that’s in the market itself.

[05:02] Casey Mauldin: The challenges that we face in that specific market is that we’re also getting the ripple effects associated with other financial institutions and the way that they’ve handled their balance sheet. So some of them, the cost of funds, and unfortunately we’re products of it, is that we have that higher than kind of the industry average. But we’ve seen it kind of shift a little bit. There’s been lights of positivity, but it’s not enough to think that we’re going to, like I said, get back to what it used to be anytime in the near future. But we have seen some relief. But right at this moment it is kind of a wait and see, Vince.

[05:45] Vince Passione: So we had Barry Kirby on the show back in July from Union Credit and great story, sounds like great partnership. He spoke with a partnership with Jovia Financial. Now you guys won techie award for member growth. Tell us a little about the partnership. How did you come to the partnership and what are some of the highlights of that partnership? Are you getting what you thought you were going to get from the original goals?

[06:09] Casey Mauldin: Yeah, we actually have. We definitely got out of it. I can say from a relationship perspective, we had great communication. We ended up getting the funded loans that we were looking for, exposure to a broader audience, which now has given us a better, given those folks a better understanding of who Jovia is and what makes us special.

[06:31] Casey Mauldin: But what we got out of it, membership growth, specifically generational membership growth, funded consumer loans, and some of the revolver lines as well. Future cross-selling capabilities. Internally, the biggest that we got from an educational perspective is the technological implementation experience, the creation of those digital journeys, best practices on how to handle the volume, and which product sets
resonate better with specific audiences.

[07:04] Vince Passione: Talk a little bit about upsell, cross-sell, right? Because when I look at the platform, Union Credit, and even for ourselves right here at LendKey, I think we’ve both mastered this idea of what I would call an offer as a service, the ability to get out there in marketplaces and embed credit union financing at different marketplaces, different points of sale.

[07:26] Vince Passione: But the challenge has always been one of upsell, cross-sell. We’ve seen this for decades with indirect auto lending, right? We hear credit unions constantly opine about how you can’t upsell that indirect auto loan into other products and services. So specifically in implementation, how does that work? How do you go through memberization, and then are there unique things that you’ve done, either from a technology perspective or product offering, to get the upsell, cross-sell, Casey?

[07:56] Casey Mauldin: Well, sure it starts in the beginning. It’s that good member experience at the time of application. If you’re going the indirect route and you’re looking at going through a dealership or something along those lines, you don’t get a whole lot of exposure. But it’s about that marketing journey that comes with it later. Once that marketing journey’s there and you can start to push people kind of towards that digital channel, it makes it a little bit easier. That’s when the technological piece comes in.

[08:21] Casey Mauldin: So when somebody comes on to take a look at what is the remaining balance on the auto loan, you’re able to come across and say, “Hey Vince, I see you have this. I can do this for you.” Ultimately, it has resulted in our side pretty darn good numbers when it comes to cross-sell. Our capture rate on the cross-sell piece is extremely high. Considering what others may have trouble with, we’ve found a little bit of a formula to be able to solve it.

[08:49] Vince Passione: Can you share the formula and can you also share, is this just this something at a large institution like Jovia only can do? Or what about smaller credit unions and how do they do this, right? Because we all worried about the industry as a whole and how those smaller credit unions are going to survive. So some thoughts and advice there to the extent you can share some more detail on what was successful, what you did?

[09:12] Casey Mauldin: Yeah, absolutely. Every credit union is different, and with me being a former banker coming over to the credit union space, it was the evolution on my side to see that it’s not always a round peg and a round hole. Ultimately in the end, it’s about the vision and the journey of that credit union. What do you want to be when you grow up, ultimately, is the motto that I follow.

[09:40] Casey Mauldin: A smaller credit union can do it. The biggest thing that I would say to all of the credit unions I’ve spoken to, whether it’s in person, at a conference, reference calls, whatever the case is, it’s more of don’t go out and do something because it fits somebody else’s playbook. Make sure it fits yours. Because you can install all of these technological challenges or these technological advancements and opportunities to your platform, but if you’re not prepared for it, you better be careful because you might actually get what you’re looking for and it might come in in waves that you can’t handle, and ultimately, in return may hurt you as an organization.

[10:23] Casey Mauldin: But on our side of it, we definitely, definitely have found a formula. It was trial and error too. The culture that we’ve set up as an organization is the fail fast model. So don’t take a negative and just make the assumption that it won’t work again. Find out what did, do your post mortems, work through the processes, and you may find out it’s not a fit for you, but you also may find a couple little gems in there that allow to be successful the next go round.

[10:53] Margie Click: Hello, this is Margie Click, CEO and president of Agriculture Federal Credit Union. As a $360 million credit union, we’re always looking for ways to innovate and expand our financial solution offerings to attract new members. That’s why for nearly a decade we’ve been partnering with LendKey to attract and acquire new credit union members.

[11:19] Vince Passione: So Casey, another thing we discussed before we started recording was a education lending, right? We’ve got, at LendKey, we’ve got about 400 clients that at any point in time are originating either private student loans or education refinance loans. As I go around talking to credit unions, I always get a bit frustrated that I hear credit unions talk about wanting to grow membership, improve the growth in their loan portfolios, and also wanted to get younger and gain access to that member earlier in their financial journey, so they can get that direct deposit and then sell all the other deposit related products.

[11:53] Vince Passione: How does student lending fit into your portfolio? What’s been the result so far? It’s a small portfolio. I think it’s about $5 million you get on the books with college AF. But can you talk about education lending and how do you get past the board? That’s the other thing, right? We hear from credit unions all the time, “It’s hard for my board members to wrap their heads around private student loans.” Those are federal loans and some of the risks.

[12:17] Casey Mauldin: Sure. So Jovia, prior to being Jovia, was Nassau Educators. It was a teacher’s credit union. So for us, the education has always been in the foundation of who we are. We want to make sure that we serve that client base as well. When we started looking at it from an asset perspective, when I came on board, we had a relationship that was not with College Avenue, it was with another group, which is why you see that on the balance sheet.

[12:42] Casey Mauldin: But from a direction perspective, student lending has its challenges because of the unknowns associated with it. When you start looking at whether it’s conservative board or conservative financial institution, how much risk are you looking at taking? When it comes to student lending, you don’t know what you don’t know. In this case, I think there’s a lot of unknowns associated with it, which is why you’ll see some people shy away from it.

[13:10] Casey Mauldin: For us, we found a good relationship with College Avenue. They’ve been extremely responsive. The product sets that they’ve delivered and everything has been good. We’ve heard great results and great feedback from our membership base. But it is something that we’re continuing to evaluate, and if we get to that level of comfort and we have that level of comfort from a product set perspective, then I feel confident that it is something we would look at possibly putting back on our books. But it’s that assurances before we start jumping into something, jumping back into something that we don’t quite
100% know where it’s going to land.

[13:48] Vince Passione: So we want to dig a little bit deeper into that. So when you say you don’t know what you don’t know, is that about outcome for the student? Because you’re doing an in-school product and today, my understanding is that college has more of a referral program for you now, you’re not balance sheeting these loans.

[14:06] Casey Mauldin: Correct, correct. Yeah. It’s more of I want to see the performance associated with it. I want to see the responsiveness and how well it’s being captured with our membership base before you start going into it. It’s with any product set that we’ve got, we look at multiple avenues on the consumer mortgage side. That requires a significant amount of investment. But if I don’t have the audience, if it’s not resonating, I don’t want it to be a loss-leader. I also don’t want to go into it with unrealistic expectations.

[14:37] Casey Mauldin: That’s the way we feel about the student lending world right now is that we’re getting interest from our membership base, and especially those that we’re attracting, we’re seeing good applications. But from a resonating perspective amongst the community, it’s still a bit of a question mark for us. Not that we wouldn’t consider going back down that path, but more of what is the future of this product set and how does it fit within Jovia’s mission and vision?

[15:05] Vince Passione: Only doing in school, not doing education refinance?

[15:09] Casey Mauldin: Yeah, we’re actually looking at several things. One of the areas that I’ve been very keen on in the past is actually trade school financing. I like being able to provide for those that are coming out into the workforce, we’re seeing a significant level of interest in it. We’ve toyed around with this for a while, but it’s in the conceptual phase. It’s what works for us, but we’re trying to find all of the risk associated with it and how we mitigate those risks if we were to go that route.

[15:39] Casey Mauldin: College Avenue has a broad enough product set that allows us to push some of those areas out to the membership base. But for the most part, it is a holistic view. I look at everything from trade school, undergraduate, graduate, specialty, all of that’s where we’re just trying to figure out what works best for Jovia.

[16:02] Vince Passione: Makes sense. What’s the average age of a member?

[16:05] Casey Mauldin (16:05): Oh my goodness. Right now it’s, due to the recent efforts that we’ve made, it has dropped significantly. So we have seen, they classify it more in an age group, but average with us is between that 45 to 59, so it’s what they define as builders, people that are starting to get settled. We’re seeing it kind of shift a little bit further down versus further up, which some credit unions maybe struggling with that aging population.

[16:42] Vince Passione: Business lending comes up a lot. Credit unions, should they be doing more of it, less of it? Is it a way to get access to stick your deposits? What’s your opinion, Casey, and how do you position it within Jovia?

[16:53] Casey Mauldin: Well, I’m a former commercial lender, Vince, so of course I love commercial lending. The reality is with Jovia, I’m surrounded by some of the best supporting cast you could possibly ask for. It is a great group. Early on when everything is going good, that was when we started looking behind the scenes. Where are areas of opportunity? What risks do we have? With our proper portfolio management, our credit underwriting, continual reviews, and contacts with our membership base, we have navigated waters about as good as you possibly could. We address the matters whenever you would see something coming, properly reserved against it versus there’s a few out there that may have decided to keep doing forbearances or kind of sweet things under the rug until the regulators tell you not to. I don’t really follow that approach, as it’s best to handle it, the issues when you see it.

[17:45] Casey Mauldin: But we have been very blessed from a response perspective that the members, even those that are struggling, stay in constant communication with us, because ultimately in the end, they want to keep the asset. We don’t want it. How can we work and navigate through the waters? We’ve been successful there.

[18:02] Casey Mauldin: In the commercial space, if somebody’s looking to get into it, you got to look at your risk tolerances internally. What works best for you, where do you see it? When everything is going great, everybody’s chasing that margin associated with commercial lending. But if you fully don’t understand that commercial space, that’s where I see the risk, which is this year we officially rolled out Jovia’s commercial lending [inaudible 00:18:31]. What we do are provide underwriting, portfolio management services, just overall credit review for these credit unions. A lot of it’s going to be your smaller banks,
credit unions, institutional lenders that might not have those internal resources that we do. So we go out and work with those institutions to make sure that they are kept up to speed.

[18:53] Casey Mauldin: I can tell you the regulatory bodies, the responses that we’ve gotten back from them have been outstanding. So we are as proactive as you could possibly be, but we’re also not naive in the sense that where we think, hey, the world is going to get back to what it used to be and everything is hunky-dory, because we don’t view that.

[19:12] Vince Passione (19:12): Now, mostly commercial for you is commercial real estate. Office, multifamily, strip malls, where’s the sweet spot for you and the team? Because my experience is that when you bring a commercial lending team on, they pick a sweet spot and that’s where they focus.

[19:32] Casey Mauldin: Sure, yeah. We are very heavy on the commercial real estate side of it. A lot of it is diversified between medical multi families. You have some office, but your offices are more in that suburban range of the cities, which we’ve seen those navigate the waters a lot better than you’ve seen inside of a major metropolitan market.

[19:53] Casey Mauldin: So the other areas that we take a look at are going to be your owner occupied, your warehouse space. Industrial has done fairly well as well. But we’re keeping those close eyes on the trends and what’s happening. Office continues to be that question mark in the end. The world that we live in now, this is a workout of the house majority of the time, so how often do I have to go back in? I go back in as needed. But we’re seeing that across multiple industries.

[20:26] Casey Mauldin: So it is one of those that we’re not saying it’s a complete negative. There are some good office assets out there. But we’re not actively trying to go out and pull it in unless there are the true supporting reasonings why.

[20:44] Vince Passione: So see change, administration change. It’s really interesting how we flip the switch right back and forth. So CFPB, likely we’re going to see some sort of curbing in the CFPB’s authority. Trump has made comments about causing all the federal employees to come back to the office. So just on a… When I ask about the impact of the administration change, but let’s start for a follow on to the real estate portfolio.

[21:12] Vince Passione: So impact on as a commercial lender, you hear something like the next President of the United States requiring all federal employees to report back to the office. Does that get you excited that office is going to get revitalized again and set the trend?

[21:31] Casey Mauldin (21:31): I’m an optimist in life, Vince, but my job makes me a pessimist, so I don’t believe anything until it actually happens. From a verbiage perspective, I’m responsible for several areas of strategy, so I have to take it into consideration. But I’m not going to put all the eggs in a basket and say that this is going to solve the office crisis. Could it get back? It could.

[21:58] Casey Mauldin: But I’m also seeing the other side of the trade, and we’ll use Jovia as an example. The way that we’re set up, I’ve actually had better performance out of my folks being remote than I have with them in the office. I can just speak for myself, personally. I get way more done in the home. There’s a lot less distractions. It’s more focused on the immediate and I can’t run from you, it’s all here. It’s on my phone. So what’s the difference versus me being in the office, I might be able to actually hide from you if we’re in the office. So a little bit different there.

[22:32] Casey Mauldin: Do I think it could be a good thing? It could. If we see that it is, then the way that we’ve set up as being an agile organization, we can pivot quickly and we got the team to be able to handle it if it were to happen.

[22:38] Vince Passione: Sure. Strategy-wise, I’m sure you went through your strategy session. So two questions. A, impact of the administration change on your strategy, pros and cons, where are the opportunities, where are the challenges? Then as you look in 2025 and think about the credit union industry as a whole, opportunities and challenges, you look at 2025.

[23:13] Casey Mauldin: This is one where truly, Vince, shooting in the dark. We’ve got ideas of where we think things are going to be. We have ourselves set up to where if it were to shift either way, we are set up properly to take advantage of it. The biggest thing I’m looking at now is the Treasuries. Where are the Treasuries is going to land? What’s going to happen? There was a lot of optimism in regards to rate cuts, that shifted. In the end, what’s the data telling us? What’s actually happening versus where we forecast?

[23:46] Casey Maudlin: I know that a lot of people are sitting there eager for things to get back to what it used to be or as close to what it used to be. Sometimes it’s maybe a little bit… Optimism is a little overzealous. So on my side of it, I try to take the multiple bits of information that I get coming in and do what’s best for Jovia. But I’m not putting my eggs in any basket that I know exactly where things are going to be, because I’d be lying to you if I told you I did.

[24:15] Vince Passione: Yeah. Long range planning seems a little tough given the number of things that are changing. That’s probably good advice.
Casey, we’re going to leave it there. Thank you so much for joining us. Thank you for our audience and tuning into this episode of 22 Minutes in Lending. Don’t forget to subscribe so you can enjoy future episodes. I’ll meet you back here at our next 22 minutes in Lending. Casey, thanks again for joining us.

[24:38] Casey Mauldin: Thank you, Vince, for the opportunity.

[24:40] Narrator: Thank you for listening to the 22 Minutes in Lending podcast. We hope you enjoyed today’s episode. You’ll find links to any resources mentioned in the show notes. If you’re enjoying our show, be sure to subscribe and leave us a five star review.