A common theme for this year’s Best Practices Awards was campaigns to bring in more deposits. And that makes sense as credit unions scrambled to find new funding to help support loan growth. The industry’s loan-to-share ratio ticked up to 83.3% at June 30 from 83% for the same period in 2018 and 79.7% two years ago, according to data from the National Credit Union Administration.
“A lot of institutions were running close to 100% for their loan-to-share ratio,” said Steven Reider, president of the consulting firm Bancography. “Deposits are critical. Credit unions can’t grow unless they have deposits.”
Western Vista Credit Union in Cheyenne, Wyo., boosted its deposits by 16.5% from Jan. 31 to Oct. 31 using a traditional form of marketing – a direct mail campaign. The $166 million-asset credit union partly attributes its success to the targeted nature of the effort. It was seeking larger deposits so it only sent the mailings to neighborhoods that met specific household income requirements.
Patelco Credit Union used data in a different way to create a successful deposit campaign. After a previous certificate offer fell flat, the Pleasanton, Calif.-based institution decided to solicit feedback from members on what they wanted. It was the first time the $7.2 billion-asset institution had used this method for a deposit product.
The overwhelming favorite was a three-year CD that allowed them to extract their money each year but would also reward them for keeping the product by boosting its interest rate annually. The campaign generated $368 million in new deposits from more than 5,100 members.
Finally, Technology Credit Union used its knowledge of its members in a slightly different way. The credit union is based in San Jose, Calif., near the Napa Valley winery region. Because of that, management believed that members would be interested in a promotion that linked deposits with wine.
The $3 billion-asset Tech offered a specially created wine bundle from Revel Wine (valued at $100) to members who put at least $2,000 into a CD. The campaign was initially focused on members with a money market account of at least $5,000.
The pilot campaign ran from Feb. 14 to March 31, bringing in more than $610,000 in certificate deposits with an average certificate amount of over $15,000. At the same time, it costs Tech CU $3,550 in expense representing just 0.5% of what was brought in.
For more on all three credit unions’ deposit strategies, click here