Bank Branches Work For CU
EAU CLAIRE, Wis.-After acquiring 11 branches from troubled Anchor Bank, Royal CU has seen a net increase in members (5%), deposits (4%), and loans (11%) at the new offices since they opened for CU business in June.
CEO Charlie Grossklaus attributes the results to strong communication with the 114 former employees coming over from Anchor as well as with the 20,000 customers-turned-members from the new locations, community involvement, and staff training. The acquisition also came with $177 million in deposits.
"I think we put 20,000 man hours into this conversion. If you do your homework, keep communities, branches, and the new employees involved, you can do well with this type of acquisition," said Grossklaus, who suggested the $1.2-billion credit union would consider a similar purchase in the future.
Since bank customers are being invited to be part of a different type of financial organization, there is heightened concern for customer run-off, acknowledged Grossklaus, who said RCU braced for a 10% to 20% customer loss from the bank offices.
Community outreach played a significant role in keeping consumers loyal to Royal. Before Anchor even provided RCU with names of the bank branch customers, RCU sent five mailings to residents near each of the acquired offices informing them about Royal and the conversion process.
Rachel Risberg EVP operations, shared that Anchor had not been involved much in the community and had been cutting back on that activity. "So we started getting involved with residents right away. We used the new staff and our staff and sponsored a lot of events. We heard a lot of feedback like, 'It's good to see the branches are involved in the community again.' That just established a lot of positive feelings moving forward."
For Royal CU there was another challenge: overcoming the skepticism of Anchor Bank customers who just 18 months earlier had been customers of F&C Bank, which Anchor had acquired. Grossklaus said in the long run that helped the conversion go smoothly. Many of the new CU employees had experience working at F&C, a small community bank, which made their transition to becoming a CU employee easier.
"I believe it would have been much more difficult for us had the employees not had that experience," he said.
Just as the credit union did with its marketing to consumers, it wasted little time explaining the CU difference to the new staff and letting the new team know who the credit union is. "When we announced our intent to acquire the Anchor branches we had Charlie, along with several other executives, visit the locations. We continued that throughout the transition."
The new team was put through a comprehensive training program and provided with support materials, like a tool that cross-references RCU and Anchor products. "A lot of the training was about teaching people what credit unions are, how we are structured, why we are in business, and how we exist to serve members. A lot of them did not know what a credit union is and told us some of their fellow bankers said they were 'headed to the dark side,'" Risberg said.
RCU allayed employee fears by guaranteeing jobs through Dec. 31 and no reductions are currently planned.