CHEEKTOWAGA, N.Y.-Andrew Godfrey has been managing Cheektowaga Community FCU for 16 years, and the family run operation is in good shape, with 14% loan growth last year, 19% deposit growth, and capital at 15.5%. Still, with the CU going to a community charter, it is looking for ways to capitalize on the opportunity, but admits it can be challenging for an $8.9-million CU to stand out. Godfrey spoke with Credit Union Journal about the challenges ahead.
Credit Union Journal: Describe Cheektowaga Community FCU:
Godfrey: We switched to a community charter a year and a half ago. Before that we served local school teachers. The credit union has always been part of my family. My grandfather was one of the founding members, and today my mother is an employee as well as my aunt.
CUJ: What is your market like?
Godfrey: We are a suburban town of 88,000 that borders Buffalo. It's lower- to middle-income, and there are banks and credit unions everywhere. But we have home banking and bill pay, which can be great equalizers.
CUJ: How is the CU faring-what are the key issues you face and your strengths?
Godfrey: We are doing well, in part due to the fact the economy in western New York has remained stable. I think our strength is our accessibility through online channels, and the fact people like coming to us.
No matter what their financial condition is, they feel good talking to us. The biggest problem we face is regulation, both in finding the resources to keep up with changes and in what the changes mean to the credit union. For example, limiting overdraft fees may result in debit cards being closed. That could hurt us and affect income.
Income is another issue, and I think a bigger one for small credit unions simply because of the small amount we start out with. While the number as a percentage of income may be the same for us as for many larger credit unions, we take much more of a direct hit when unexpected events occur, like the recession, the corporate assessment, and new regulations that limit income streams.
CUJ: How does your field of membership help or hurt the CU?
Godfrey: Our FOM is the town of Cheektowaga. Moving to a community charter changed our potential membership from 3,000 to 88,000.
CUJ: What is the CU's brand?
Godfrey: We do not have a brand, per se. But members see us extremely favorably, as someone they can ask any financial question and get an honest answer. The community itself, I believe, does not have any perception of the credit union because they really do not know a lot about us.
CUJ: How are you supporting your brand?
Godfrey: Our brand is a work in progress. We are trying to figure out the best way for a CU of our size and resources to be seen.
CUJ: How are you handling marketing?
Godfrey: Expenses here are a primary concern. When you are small and you spend enough money to try to make an impact and it does not work, you really take a hit. It's a gamble that we may have to take, though, to be seen.
The other option is to use a lot of smaller marketing efforts, which helps you better gauge results and not risk spending a lot on something that may not work. But the other side of the coin is you may not make the impact you need.
We have increased our marketing budget a little this year, and if we take the approach of using a number of smaller promotions, we will advertise in places like church bulletins and in the same ones on a fairly consistent basis. We think that will help us be seen by one concentrated group of consumers, and we will stand out more than we would if we took an ad in the local newspaper.
CUJ: What is the shape of your loan and product portfolios?
Godfrey: Our product portfolio is robust. The only things we don't offer is a credit card, a health savings account, and auto leasing. Our loan portfolio is in good shape: 16% unsecured, 24% used auto, 9% new auto, 18% first mortgage, HELOC 28%, and other loans 5%. Loan growth did not keep up with savings growth last year, but it was above what we expected.
CUJ: What is your pricing strategy?
Godfrey: We don't work on the spread philosophy, necessarily. It's more about remaining competitive. We try to have nice rates on loans and savings and remain in the top 25% of the pack. We know we can't lead in every category; we try to keep our rates fairly consistent, and that always keeps us on our members' minds.
CUJ: What are the obstacles to growth?
Godfrey: The population of Cheektowaga has been declining for years and that may continue. It used to be a huge steel town, and jobs in other industries are coming back a bit.
CUJ: What are the growth opportunities?
Godfrey: Truthfully, how the banks are treating consumers. We think there is a strong opportunity to take their business for at least the next six months.
CUJ: What does the future hold for you?
Godfrey: I am most concerned about the changes to the corporates. We do all our check, debit card, and ACH processing through them. If they have to change their pricing structure, that will affect our pricing. Merger is something we do discuss, but in the sense of us being the surviving credit union. We have sent letters to credit unions, about our same size, to see if they might consider merging with us.
CCFCU by the Numbers
Assets: $8.9 Million
Chartered: 1959
Members: 1,127
Employees: three FT, one PT
Number of locations: one
Core System: Fiserv CUBE PLUS
Capital: 15.42%
ROA: .21%
Total loans: $5.5 million
Loan growth 2009: 14%
Loan rates: (A credit, Feb. 26): personal 8.95% APR, personal companion 8%, 61-72 month auto 6.25%, 20-year fixed first mortgage 6.30% 15-year adjustable HELOC-prime + 0% (3.25%)
Total deposits: $7.5 million
Deposit growth 2009: 19%
Deposit rates: (Feb. 26): share account 1% APY; checking-free, no interest; MMA: $10,000-min. 1%, $25,000-min. 1.25%, $50,000-min. 1.76%; CDs: 6-month1.36%, 1 year 1.76%, 2 year 2.12%, 3-year 2.63%
Delinquency Ratio: 1.21%
Charge-offs: .57%
ALL: $30,000
Investment mix: 40% corporate, 60% CDs
Net income: $19,000
All Data For Year-End 2009
Seeking to tap the collective knowledge of the credit union community, this is the first in a series being launched by Credit Union Journal focusing on specific small CUs and their challenges. Readers are invited to share their advice and insights with the featured CU. Cheektowaga Community CU can be contacted at
