VENTURA, Calif.—Bank Transfer Day is gone but it is not forgotten-especially at Ventura County Credit Union.
Joe Schroeder, president and CEO of the $660 million-asset CU said that Bank Transfer Day was "great" for his institution.
"It was a tipping point, and we have not slowed down since," he said, noting in the last 32 months VCCU has averaged 590 new members per month. "This is excellent growth. The angst and feelings behind Bank Transfer Day were more significant in our county than in other places. People in Ventura County were really mad at banks."
VCCU did a special opening on Saturday, Nov. 5, 2011 and opened 320 new memberships in one day. According to Schroeder, the volume of visitors "told us we were fools not to be open on Saturday."
"Being open on Saturdays since then has really helped us become a community credit union," he said. "In the last three years membership is up 30%, and net new membership is up 17% in 36 months. We have not been trying to grow assets or deposits, but they are going up due to membership growth. ROA has averaged 95 basis points for the last three or four years, and our delinquency ratio is almost too low at 0.15%."
How The First Half Went
In the first half of 2013 VCCU reported net income of $2.7 million and a net worth ratio of 8.5% ("well capitalized"). In 2012 its net income was $5.8 million before paying $518,177 to the Temporary Corporate Stabilization Fund, with a net worth ratio of 8.4% ("well capitalized"). In 2011 its net income was $6.2 million before paying $1.2 million to the Temporary Corporate Stabilization Fund, with a net worth ratio of 8.5% ("well capitalized").
In 2010 VCCU reported net income of $6.3 million before assessments of $1.1 million, with a "well capitalized" net worth ratio of 8.3%. It 2009 its net income was $1.8 million, with a net worth ratio of 7.6% ("well capitalized"). In 2008 it posted its only loss of the recession, $5.6 million, but kept its net worth ratio at 7.7% ("well capitalized"). In 2007 it had $1.7 million in net income, with a net worth ratio of 9.4% ("well capitalized").
Ventura County CU recently opened its first new branch in 12 years in nearby Port Hueneme. Schroeder pointed out without a new branch or any mergers, all of its growth is "organic."
"Three years ago we decided to concentrate on Ventura County, with some focus on Santa Barbara County," he explained. "We had merger opportunities outside the county, but decided not to. We think there is a lot of room for growth in these two counties."
Several years ago VCCU was a credit union only for employees of Ventura County, but since then it has made a transition to being a community CU. In 2007 it had 15,000 households that were community based, as opposed to through work. Today, that number is 26,000. It has only grown its SEG membership by 200,000 since 2007, Schroeder reported.
Smart Marketing
The key to all this growth, Schroeder said, is "smart investing" in marketing. He said management has examined the market carefully, and has instituted several programs aimed at outreach and community development. For four years in a row it has been named the Best Financial Institution in Ventura County by two different newspapers, he noted.
"Our name and brand are strong, and when people come in we do a really good job with them because we have a top notch staff."
The Port Hueneme branch did a "soft opening" in early September, but it generated 100 new memberships in its first seven weeks. In addition, it funded almost $300,000 in the first four weeks just for consumer loans, which Schroeder said is unusual for a new branch in a new territory.
"We did not expect those types of numbers, particularly when we did not back it up with a lot of marketing and advertising," he said
VCCU has seen "good growth" in lending overall this year, which Schroeder said is welcome as it did not have good growth in 2010-2011. Part of this relates to a strategic decision not to hold on to 30-year mortgages, he explained. VCCU has been making long-term home loans but then selling them-a total of approximately $85 million to $90 million in the last two years.
"I have always liked to operate close to 85% loan-to-share ratio, and we are at or below 50% right now," he said. "We need to get the ratio higher and we are working on it. We will have an outside consultant take a look at our underwriting to expand that."
VCCU also is working on its funding ratio. Schroeder said he thinks of lending as having three legs-applications, approvals and funding. To address the falloff from the second leg to the third leg, it is instituting a callback program for people that are approved but do not fund the loan. The goal is three contacts within three weeks, he said.
The credit union also is looking at expanding its pre-approval system. Schroeder said it switched to a new lending system, "and that has helped," but it is looking to expand even more.
"We are good, but not yet great, at taking new members and getting them pre-approved for a credit card, a line of credit and an auto loan," he assessed.
Personal Contact
VCCU has four dedicated home loan officers who "work the streets of Ventura County," Schroeder said, up from zero four years ago. It also has one consumer loan officer and is looking to expand the latter position.
The credit union's mortgage officers are assigned to certain areas. In recent years mailers have carried the officers' names, pictures and phone numbers. Schroeder said marketing with a personal touch seems to be working better.
"We do not wait for people to come in, we are going out into the community more than we did three or four years ago," he said. "We believe it is our mission to be the local shop. We have several people in community development, and we are very visible in the community."
Full-time staffers at VCCU are allowed to take off 40 hours per year to go work at a non-profit and get paid for it. Schroeder said the credit union is working with several companies to reach out to agricultural workers, who mostly are unbanked. The goal is to help these workers establish an account and teach them how to use a debit card.
"They are paying lots of money to cash checks at payday lenders, so we want to help them," he said. "You do not make a lot of money doing this, but we think in the long run it will be good for us. We are proud of the way it helps change peoples' lives. It is a good fight and we are going to keep fighting."
VCCU advertises regularly on the radio, in newspapers and through its newsletters. Media time is more cost-effective in Ventura County than in Los Angeles or San Diego, which he said helps a lot.
Looking Ahead
According to Schroeder, the future of credit unions is "pretty bright," and "we think ours is pretty bright, too." He said it takes approximately 10 months to 15 months for new members to start borrowing, and VCCU is starting to see an uptick from its many new members.
"The membership growth we have had is people in their prime borrowing years. We think that is going to pay off," he said. "Our chairman of the board is getting recognized as the California Credit Union League Volunteer of the Year. We will open more branches, possibly two in the next two years. There are pockets in Ventura County where there is a need for credit union services."
