Pat Smith came to Oregon Telco as CEO four years ago. It had one facility and was scarcely known in its home city of Portland – it did not even have an outdoor building sign. For more than 60 years, Oregon Telco had been the credit union for a single-sponsor, with a shrinking base of late. In 2001, it became the first community-chartered credit union in the state, serving six counties in the Portland area. Pat developed a plan of gaining recognition in the community and for expansion. Rebranded as Unitus, the credit union now has $660 million in assets, 59,000 members, and a capitalization ratio of more than 11%. But much more remains to be done. Traditionally the credit unionhad a checking account penetration of only about 35%; it had a small percentage of depositors controlling a disproportionate bulk of deposits, thus creating a risk of disruption should they withdraw their funds.

(more…)

1. Create a brand and then create a “story” around the brand. Work hard at developing the brand every day. Ensure that the overall business model and your value proposition align with the brand.

2. Train the staff in the fundamentals of your brand and in the
goals of the credit union.

3. Develop measures for creating an overall roadmap to enhance
profitability for the organization.

4. Develop different profitability strategies for different user groups.

5. Develop strong and visible links to the community.

Mark Spenny is the CEO of CEFCU, which began in 1938 as the credit union for Caterpillar, the construction equipment company. CEFCU at $3.1 billion with 228,000 members has had a community charter since the 1980s and serves 14 counties in central Illinois, plus hundreds of other employer groups, including Caterpillar and CAT Dealer employees nationwide. In the Peoria area, it enjoys penetration of more than 70% of households, 70% of which consider CEFCU their primary financial institution. CEFCU is well capitalized and has a good earnings record; member loyalty scores are very high. The credit union is the largest mortgage lender and auto lender in the area and has a strong business loan program. Lately, the local economy has been healthy — Caterpillar has enjoyed record earnings, other manufacturing is strong, agriculture is doing well, and the area profits from a notable medical community. Still, CEFCU is concerned about three aspects of its business: declining consumer loans, online communications with its members, and connection with young people.

(more…)

1. Look for new sources of loans. Risk-based lending is worth the attendant losses.

2. Place your front line people on your most pressing problems.

3. Work actively for the youth market.

4. Identify your competitors, know what they are doing and devise a strategy to counteract their efforts.

5. Make your website as friendly as possible; people increasingly want their relationship with you through the Internet.