AMARILLO, Texas - This city’s economy is on “cruise control” according to one CEO, whose credit union is benefiting from having cleaned up a serious delinquency problem in the middle of the economic downturn.
“Amarillo was booming and now I’d say we’re coasting steadily,” said Plains Bell FCU CEO Terry McCormick. “We’re not experiencing the severe mortgage problems others are.”
Giving CUs the nod for being astute lenders, McCormick feels the mortgage mess has been avoided here because “bankers weren’t greedy. Consequently they made realistic appraisals and had people put money down–normal sound business lending practices.”
At his own CU, McCormick admits consumer loans had been a problem, seeing delinquencies jump to 3% in recent years. It took Plains Bell three years to correct the problem by tightening underwriting standards and aggressively pursuing collections to get that number down to 1% this year, which is more in line with peers.
With process improvements driving the $24-million Plains Bell’s lending turnaround, what’s lifting the local economy, according to McCormick, is a recent expansion inside the Bell helicopter manufacturing plant, an influx of medical professionals to a local healthcare center, and the oil and gas industries.
Just as other Texas credit unions have told CU Journal that they’re taking steps to prepare for a weaker economy, Plains Bell is keeping costs in line–but that’s not new.
“We always think about expenses,” said McCormick. “When we were having delinquency problems, the money we made was funding our allowance accounts. So consequently we have been in what I’d call an expense reduction mode for the last three years, watching costs for utilities, office supplies, payroll, healthcare–everything. I’d say the economy is making everyone work like we are.”
