CU Leaves 'Safety' Behind To Spark New Growth

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BREWTON, Ala.-Brewton Mill FCU has doubled its membership in the last five years by moving out from the confines of its small office at the local paper mill.

Going to a community charter and leaving the "safety" of the sponsor company, where the credit union's only overhead was employee salaries and office supplies, was a difficult decision for the small CU, said CEO Linda Williamson, who is glad she made the change. "It turned out to be the right decision for us, especially since the paper mill closed down two years later."

What prompted BMFCU to leave Brewton Paper Mill was the expansion of CU services in 2005, adding debit, share drafts, and CDs. "The vision we had for the credit union necessitated a move to a more accessible facility. We wanted to open up to more people," explained Williamson.

The CU dipped into its capital (now at 9.34%) to build a 2,700-square-foot, standalone facility a quarter mile down the road from the paper mill and opened those doors in 2006, getting its community charter a year later. Membership jumped from 1,000 in 2005 to 2,000 today. Assets soared from $12 million to $20.1 million.

An important step in the transition was immediately immersing the credit union in the community, sponsoring high school sports and academic events, and assisting local charities. What also spiked growth, Williamson shared, was the economy. During most of the recession, BMFCU was the only credit union in town. "Bank customers flocked to us for safety," Williamson said.

The CEO said the biggest mistake the credit union made in moving outside of its original sponsor was not going to a community charter sooner. "We took baby steps in that regard, and it has hurt us. We had to turn away a number of consumers the first year in our new branch because they were not eligible to join. Now we have to do a little damage control with people still thinking they can't be a member. I recommend to any credit union leaving a sponsor's facility to have their community charter in place as soon as they move out."

Growth has leveled off this past year. The next step is for the credit union to change its name, and BMFCU is currently working with a marketing firm. Williamson said the credit union's focus in 2011 is explaining to the community that the CU is for everyone. BMFCU is spending $50,000 on advertising, easily its largest expense outside of salaries, Williamson said. The credit union has grown from three employees, including Williamson, to nine full-time and two part-time.

Williamson acknowledged that industry and regulatory pressures challenge small credit unions to grow, and for her CU moving outside the sponsor company and going to a community charter was the answer. "We were in the safety of our sponsor, paying no rent and having little overhead," Williamson recalled. "Go from that to a new building and lots of overhead. We were scared, wondering if new members would turn out. Our examiner told us to build the branch and members will come-fortunately they did."

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