PORTLAND, N.D.-An image change and an aggressive approach in agricultural lending is paying off for Portland Credit Union.
The $10-million institution was ranked first in its asset size peer group for lending in Q3 of 2008 by Callahan & Associates. In a town of just over 600 people, Portland CU has to compete with a "very aggressive" local bank and another bank just two miles away.
"Everybody is competing for the farm lending. which is our big strong point," said President Jessie Hogfoss. "We changed our image a couple years ago. We are some place that is very comfortable."
The image marketing has focused on is the credit union's member-friendly loan servicing and overall member satisfaction.
Like the other financial institutions in the area, Portland CU relies on about a dozen agricultural loans, which average about $250,000 a piece, to stay in operation.
"We've always given them a little bit of an advantage on the interest rates and we try to keep those (rates) the best that we can," Hogfoss said. "This is what this entire community is. If you can't help those guys, you're cutting your own throat."
With such a limited population base, and one that does not show signs of significant growth, Portland CU constantly has to find ways to attract members from other institutions. The credit union's agricultural loan officer crafted a program designed to do just that, but in a way that would also cement relationships with future generations. The program lends youth in 4-H programs up to $5,000 to cover the expenses associated with their projects, whether it is an art project or for purchasing and caring for an animal. The program provides children with much needed funds and teach them financial skills, and also seeks to entice their parents into joining the credit union.
"We did a special farm ag loan just for those kids at a very low interest rates," said Hogfoss. "Sometimes when you get little Johnny in here, big Johnny follows."
The 4-H lending program, combined with the image, has produced dramatic results. Hogfoss said Portland CU saw lending grow by $2 million in the past year - fully 20% of the institution's current assets. The CEO is confident that the credit union should hold onto those gains and only continue to prosper as the rural community is well insulated from the recession-farmers may actually see a strong year as food demand remains stable, prices are steadily but slowly rising, and fuel costs will almost certainly be far lower than they were for the past seasons.
"Once we can get our members in here to give us a shot we lose very few," said Hogfoss.
