BUENA PARK, Calif. -
The lone exception to that rule may be Adam Denbo, CEO of California Agribusiness Credit Union. The Buena Park credit union, which serves the state's agribusiness industry, listed $22.3 million in assets in its June 5300 Call Report, a number that jumped to $32.5 million by September.
"Our vision is that we'll become the premier credit union serving California's agribusiness community," said Denbo, who spent four years each in the IT departments of Orange County's Credit Union in Santa Ana and Wescom Credit Union in Pasadena before arriving at California Agribusiness in May 2005. Thanks to some sophisticated "big CU" management techniques Denbo brought with him, California Agribusiness is achieving that goal.
Much of the assets jump had to do with a three-way merger between California Agribusiness and two smaller California credit unions: $2.7 million Knutson FCU in City of Industry and $8 million California's First FCU in Garden Grove.
California Agribusiness brought Knutson FCU online in July and should have California's First FCU system up and running by Dec. 1, Denbo said.
Before the mergers, however, Denbo instituted an array of new services and management methodologies designed to right the credit union, which was listing badly in due to earlier mismanagement.
For the five years prior to Denbo's arrival, the credit union had operated under a management contract with the United Agribusiness League, an organization of agricultural employers and trade groups and the credit union's largest SEG. Net losses and management turnover characterized the credit union during those years.
"They understood the benefits of credit unions, but not how to run a credit union," said Denbo. "NCUA and the California Department of Financial Institutions wanted California Agribusiness to start showing a positive net income."
During the five years the United Agribusiness League held the management contract, the credit union consistently posted negative net income losses ranging from $26,963 in June 2000 to $100,677 in June 2003,with assets growing to no more than $25.5 million. When Denbo came on board in 2005, California Agribusiness was realizing net income losses of more than $118,000 for the period, according to NCUA's 5300 Call Reports.
Denbo was brought on board for his experience in credit union IT operations and management. The executive also holds an undergraduate degree in agribusiness management for California State Polytechnic University in Pomona. The combination works well in helping the credit union, founded in 1936, remain true to its roots, he said.
In addition to merging several small credit unions, Denbo also instituted a variety of new services, including new fee structures, to help bolster the credit union's wavering bottom line. One of the first fees instituted was a $1 fee for all foreign ATM transaction, something that previous management had granted members for free.
"That's $36 a day left on the table for us to take in," Denbo says. "We had to do whatever we could to bring a positive net income to the credit union."
California Agribusiness also brought in a variety of business partners, including CUNA Mutual Group and Autoland to enhance the credit union's service profile and increase revenues to the institution.
Denbo also instituted a $25 stop-payment fee, netting the credit union an average $2,500 per month in fee income and increased NSF fees to $23 from $18. The credit union also changed its data processing system to ULTRADATA, which enabled it to offer home-banking services.
In addition, CACU has tied its loan pricing to the Fed's prime rate, enabling it to adjust rates to offer competitive loan products within hours of any significant rate change. Most importantly, perhaps, the credit union converted all its marketing and online materials to both Spanish and English, including the loan notes themselves, as a way to reach its growing Hispanic membership.
"According to our research, 84% of our members prefer to conduct their financial business in Spanish and the typical new member is likely to be a 36-year-old Hispanic," said Denbo. "We've even converted our loan notes to Spanish so that our members feel comfortable that we're not trying to trick them into signing an English document they may not understand."
The changes have given California Agribusiness a huge advantage in the marketplace, Denbo said, and one that has helped the credit union not only right itself in the water, but offer smooth sailing to a solvent and more profitable future.
"We can be just as fast-paced and service-oriented as any large credit union," Denbo said of his 13-member staff. "You'll see astronomic growth in future NCUA Call Reports."
FOR MORE RESOURCES
To read more the previous stories in this series go to www.cujournal.com and search "Chihuahua" in the archive:
To read the series of stories about the advantage larger CUs have over small CUs, go to www.cujournal.com and search the following:
* Will Only The Big Dogs Survive?
* The Nine Factora
* Small CU, Big Plans
* Very Little A Small CU Can't Do
* Medallion Winner
* Not Retiring
