FORT WAYNE, Ind.-The new CEO at 3Rivers FCU is aiming to maintain his credit union's successes of the last decade-but he'll have to do so with increased competition and a smaller branch footprint.
Don Cates-who served as EVP of sales and lending before taking over as CEO of the $727-million CU in January-said that he is focused on reaching the goals set forth in the CU's most recent strategic plan, titled "2017 and Beyond." 3Rivers has grown approximately 10% each year for the last decade, said Cates, and the strategic plan calls for continuing that pace of growth, with the expectation that assets will rise to $1 billion by 2017. "It's going to be harder to do that-there's a lot more competitive pressure and the market won't grow at that rate, so you're going to have to compete and take it from somebody," said Cates.
Making things more difficult is that the strategic plan is built around achieving that growth through 3Rivers' existing footprint and infrastructure.
Cates spoke to Credit Union Journal shortly after 3Rivers announced its branch footprint would be shrinking slightly. Its branch in Van Wert, Ohio is set to close on June 15 due to underuse. "When you look at that particular institution, it has grown, but it's diluting our 10% (growth)," said Cates. "It's grown at one-third of that rate. That market itself is not projected to grow. You start looking at the personnel and the resources it takes to do that. If you have something that's really a laggard and going to hold you back, that's not fair to those that support it, the members, and those that work there."
Room For Organic Growth
3Rivers' strategic plan does not call for expansion of facilities or growing its FOM. Rather, stressed Cates, it will focus on leveraging what it already has, while picking up new members where it can. Cates noted that 19 branches-soon to be 18-is "a heavy branch load" for a credit union of its size, so there are no plans to expand the footprint beyond that.
"We are a significant player in the market, but there's still enough growth where we're not at that point of diminishing returns yet," he said. "Even if you're at 30-35% of the market, it's not unrealistic to do that. We're not at the point yet where we can't grow organically in the market. I believe with our existing membership we have growth opportunities ... as well as bringing in new members."
He said he expects growth to be driven by a 50/50 split between new and existing members.
"We want to have a culture of member relationships and not a sales culture," he said. "A culture where we're having conversations and finding out the entire need, not just the member sitting in front of us asking about today. Find out where they want to be, and be proactive in our approach of bringing them solutions today that they may not even be asking for or be aware of."
