ORLANDO, Fla. Two CEOs who have taken different paths to arrive at similarly successful places when it comes to returning value to members emphasized the same points to attendees at Credit Union Journal’s Grow Show here: success requires a sound strategy and singular focus.
Jeff Disterhoft, CEO of the University of Iowa Community CU, Iowa City, Iowa, described how his CU enjoyed 24% loan growth last year, boosted earnings 59% year over year, and had ROA above 2%. Disterhoft said the success is the result of a three-legged business model: value, growth and efficiency. “I can tell you that this model lets you compete with any financial institution of any size,” said Disterhoft.
Two other factors are drivers of success at UICCU: an emphasis on nine values that the credit union “lives by,” including truth, trust, mentoring, openness, risk-taking, giving credit, integrity, caring and respect; and attractive compensation for its employees. “I will be the first to admit I was not a big proponent of the values,” said Disterhoft. “I did not see the value of values. Now I am the poster child of values.”
Meanwhile, as UICCU manages to an 8% capital ratio and invests in growth when capital goes above that mark, DFCU Financial, Dearborn, Mich., has been managing to an 11% capital ratio and is giving back to members in record numbers but in a different way than UICCU.
DFCU last year paid members a $21-million special patronage dividend, the biggest credit union payout ever, bringing to $130 million the annual patronage dividends it has paid since 2006. The dividend is based on members’ deposit and loan relationships.
CEO Mark Shobe told Grow Show his organization is running lean and efficiently, spending 52 cents to make a dollar of revenue and has 1.53% ROA. “We give back on average about $221 per member and the biggest payout last year was $18,000.”
Like Disterhoft, Shobe emphasized that the CU has to stick to its efficiency focus, emphasizing that in 2000 DFCU had six offices and now has 23 but the same number of employees.
