By Mike Valentine, CEO, Baxter Credit Union

2007 turned out to be a challenging year for net income.  A continuing margin squeeze coupled with a large increase in loan delinquencies and write-offs resulted in a strained ROA.  We experienced increased losses across all of our products and geographies.  We definitely see this trend as part of a broader shift in the credit cycle that is testing our risk management assumptions and pricing strategies.  The initial attention on subprime mortgages has obviously grown to a much more far-reaching strain on the economy.
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Setting Lofty Goals and Being Entrepreneurial Drives FSCC Forward

By Bonnie Kramer, COO of FSCC, San Dimas, Calif.

Financial Service Centers Cooperative (FSCC) is a non-profit cooperative CUSO that began as a shared branching network to give credit unions a cost-effective way to expand their footprints. Our mission is to “provide a cooperative network of convenient, low-cost access points so that credit unions can compete.” Our vision is simply to make American credit unions the most convenient financial institutions in the nation.

FSCC began in 1990 with the idea of establishing a system of stand-alone shared branches. This proved expensive and as a result, our ability to expand the network was limited. We needed a new model. We explored the concept of outlets, and in fact pioneered the effort to create an interface that would work with major teller platforms. We found a way to make many different teller platforms act as though they were one. This was a technological breakthrough that has carried FSCC forward ever since.

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By Seena Faqiri

Credit union branches are sprouting at a rate of almost 1,000 a year, but generally these are not the branches of small credit unions. With total office expenses rising 11.4% in 2006, even when credit unions outgrow their only branch, they find it very expensive to expand.

In June 2001, three credit unions had a ribbon cutting ceremony — at the same time and at the same location. Call Federal Credit Union ($257M in Richmond, VA) made this possible by opening a new branch in the nation’s first Credit Union Mall. As only credit unions would do, Call FCU, under the leadership of Roger Ball, invited two other smaller credit unions to share a new facility in Midlothian, Va. The invaluable expansion allowed both Connects Federal Credit Union ($64.4M in Richmond, VA) and Partners Financial Federal Credit Union ($59.5M in Glen Allen, VA, and named Richmond Federal at the time of the grand opening) to expand their reach and convenience with one affordable decision. The Credit Union Mall allowed Connects FCU and Partners FFCU to expand their operations with actual branch space, a luxury neither credit union had previously enjoyed.

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By Nick Connors

One of the many challenges of running a business of any size is properly allocating and managing corporate purchases. Although company checks and business credit cards have long been the standard form of payment among businesses, many companies are now turning to procurement cards as a fast, efficient, and cost-saving measure.

Practice What You Preach

Teachers Credit Union (IN, $1.7B) has been offering procurement cards, also called “purchasing cards,” to their members’ businesses. Before doing so, however, Teachers tested the product internally. “You have to know what you sell,” says Amy Sink, Chief Financial Officer for Teachers. So employees at Teachers were given procurement cards in an attempt to see how they liked the product and how it could best be used.

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By Claire Dayrit

Local banks were not providing good business service lending, so Arizona State stepped in with a full range of popular service.

In April 2005, Arizona State Credit Union began to explore business banking because its Board believed providing business banking products and services would benefit both the credit union and its members.

The credit union would gain financial benefit from funding future projects and member services. Chuck Anderson, SVP of Business Banking, says that Arizona State’s research regarding the members’ perspective was also positive. “Members with small businesses reported their existing financial providers to be impersonal, arbitrary, and disinterested in meeting the needs of small business. By contrast, they loved the credit union, the staff, the caring, and the service levels experienced in their consumer banking.”

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