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It's Time to Enroll in FCA

It's Time to Enroll in FCA

Enrollment is open for institutions that wish to participate in the Functional Cost and Profit Analysis (FCA) program, a cost accounting service developed by the Federal Reserve System more than 40 years ago. Thousands of banks, credit unions and savings and loan associations have used it.

Two years ago, the Fed completely overhauled the FCA program to incorporate customer-requested improvements, including new electronic functions and the elimination of some cumbersome reporting requirements. Two versions are now available: FCA Basic and FCA Plus.

FCA Basic provides cost and profitability data at the product line level and requires only minimal information. FCA Plus provides more in-depth information at the product level, as well as "what-if" software to perform various data analyses. Both versions prepare a customized individual report that includes peer group and year-to-year comparisons, in addition to the product or product line expense and profitability analysis.

First Citizens Bank in Elizabethtown, Ky., has been using FCA Basic since 1993 and Patty Paris, senior vice president, said the software's cost analysis function plays a strong role in the bank's strategic planning.

"FCA Basic breaks down the costs of our bank's services, such as making a loan or offering checking accounts, and really helps us see their cost effectiveness," explained Paris.

Wayne Irby, cost accountant at First National Bank in Oxford, Miss., also enjoys this benefit of FCA. First National Bank has used FCA Plus for the past two years.

"The software really helps us understand our bank's strong points, such as what's profitable and what's not," said Irby. "We have a much clearer picture of our organization because we're using our own numbers instead of estimated industry averages."

Although it may seem labor intensive to collect the data for FCA reports, the process has a high learning curve. "Once you develop a procedure for gathering the numbers, it's quick and very easy to do," said Irby. "After the first year, FCA became routine."

The cost to participate is only $200 for FCA Basic and $400 for FCA Plus, which includes unlimited customer support and a free copy of the National Average Report, which costs $150 if purchased separately. We encourage you to take advantage of this opportunity.

If you have any questions or want to enroll, call FCA Coordinator Dan Horton at (314) 444-8629.