VERMILLION, S.D.-One small CU here has found success the old-fashioned way-sustained growth by responding to the membership and leveraging a healthy dose of collaboration.
"Our success comes from giving members what they want," said Janet Mount, CEO at Vermillion FCU here. "My staff is very good about asking questions of our members and listening to what they say so we can implement that program. Going back in the last 10 years, they wanted online banking and online bill pay, and we did that."
Increased card offerings and mobile were also the result of member requests.
VFCU currently has more than 2,200 members and $14.5 million in assets. At year-end 2001, the CU was barely above $5 million.
The Bread & Butter
Vermillion FCU's net income for 2012 was $113,000, an increase over the $70,000 it earned in 2011. This year appears to be on a similar track, with $45,000 in net income as of its most recent Call Report. That's largely being driven by car loans and second mortgages, which constitute almost two-thirds of its overall lending portfolio. VFCU currently has just fewer than 900 loans on the books for a total of $6 million.
One thing Vermillion FCU doesn't do is first mortgages. "That's where the biggest regs and changes have come, and we simply don't have the staffing and the ability to keep up with all of those compliance issues," said Mount. When the credit union gets those requests, it routes members to CU Mortgage Direct in nearby Sioux Falls, "so any request we get we can at least give them a direction to go."
Mount also said that VFCU has seen an uptick in auto loans during the last 12 months, prior to which "they were pretty stagnant for a while," though new car loans are still a struggle because the CU can't match the low rates that dealers offer. VFCU does not offer indirect lending.
So why has VFCU succeeded when other similarly sized CUs have floundered? One element of that may be collaboration. Vermillion's back-office processes are all handled by Services Center FCU in Yankton, S.D., which has helped keep costs down. Mount also praised Grand Rapids, Mich-based processor CU*Answers, which she said has helped it to be able to offer products such as mobile banking, which many small CUs often struggle to afford.
Mount stressed the importance of collaboration and positive relationships with those who can assist the credit union, as well as with examiners. She called her relationship with regulators "very good," and confessed that she isn't shy about picking up the phone to call examiners or NCUA's Office of Small CU Initiatives to get answers to various questions.
"I'm not going to say that I only ask once, because I may have to ask two or three or four times," she said. "But I eventually find someone who can point me in a direction of where I need to go."
Vermillion FCU tends to shy away from advertising specific products, said Mount, and instead promotes the CU itself and the credit union difference, and lets the products and the pricing speak for themselves. It also helps that Wells Fargo is the only major national bank in the market, while the rest are regional and community banks.
Word of Mouth
VFCU has a Facebook page, but has not gotten extensively into social media. In a town of 10,000 people, said Mount, word of mouth is still the best advertising, but she said that the credit union has also benefitted from the increased national presence CUs have had in recent years.
Many small CUs have struggled to make money without efficiencies of scale, but Mount said that much of why her credit union has found success is because of the cooperative spirit.
"It is a struggle," she said. "I won't pretend we don't work very hard at this, because we do-but it seems to be working."
