PORTLAND, Ore. — Like a lot of CUs, Advantis CU chalks up much of its success to its focus on service. But in this case that also means service to auto dealers.
"Our initiative is to provide best in class service," said Chris Anderson, VP of lending for the $723-million CU, which recently was one of the top two CUs in the Return to Borrower rankings from Callahan & Associates for CUs with assets between $500 million and $1 billion. "With our indirect lending platform, we have managed to grow our business 300% over the past 15 months. We have done this by being dedicated to service to our auto dealers. We also focus upon funding dealer contracts within 24 hours of receipt knowing that their cash flow is a key element of the operation. Our dealer relations know what the Advantis niche is in the market."
Anderson said this relationship is not rate driven as much as it is service driven.
"We believe a certain percentage of dealers would rather have a lender relationship that they can speak to and work with rather than simply be rate-driven," he explained. "Our sales people maintain daily, personal contact with our dealers through visits, e-mail, phone and print media."
Mortgage Targets Already Hit
But it isn't just auto lending that has propelled growth in its loan portfolio, with its 2009 mortgage lending targets having already been hit.
"Through a combination of secondary market and portfolio loan programs, we are able to provide products that meet the needs of our members whose credit profiles vary," he said. "We have an outside loan originator who canvasses the Realtor and builder markets seeking new loan opportunities. We have three seasoned in-house loan officers whose combined experience is over 50 years in lending. Our members recognize them as trusted advisers."
Anderson said that the 39,000-member CU has also made some operational and technology changes to streamline production. For example, all of the loan officers have their own web page that allows our member to apply directly to the loan officer online.
"These sites offer rate monitoring as well as transaction monitoring areas for our member," Anderson said. "Operationally we have streamlined our loan processing and funding areas to manage our pipeline of loans. We have highly seasoned processing and funding teams who are dedicated to the members' experience."
Anderson said the credit union's mission is simple, and that is to find those members where service matters.
"Since we cannot control the economy, interest rates, property values or employment, we focus upon the areas we can control, and that is service to our members," he said. "This is always within our direct control."
As a result of the economy, Anderson said the CU has made some changes to its lending portfolio. "We have reduced our maximum loan-to-value ratios on virtually every loan program," he said. "This requires our members to have a personal investment in the collateral we are financing. With a greater personal investment we find our members are less likely to default on our loan."
The credit union is also requiring complete appraisals on its second mortgage loan programs for most loan submissions.
"We have increased the minimum credit score requirements on all products and we also utilize a BNI score in addition to a FICO score to determine loan eligibility," Anderson said. "The BNI score is a solid indicator of escalating debt and probability of future bankruptcy or repossession."
Proof of Income a Must
Advantis CU is also now requiring proof of income on most loan applications.
"Having a true and accurate income figure allows us to manage the program debt ratios as we determine loan eligibility," Anderson said. "Overall, we have become more conservative with all of our guidelines in light of the current economic times. Our low overall delinquency figures prove that this was a prudent change for Advantis as we are protecting the interest of our depositors while we lend money to borrowers."
But there are also things the CU didn't have to change, in regard to lending.
"Our marketing team is superb in identifying potential prospects for lending," Anderson said. "We perform regular, timely marketing campaigns to call attention to our excellent rates and programs."
Also, Anderson said that the Advantis website is a powerful tool to share product information.
"Our real estate loan officer's personal web pages has also been a winner," Anderson said. "Our success is attributed to our professional lending team who seek opportunities with qualified borrowers every day. They offer their expertise and guidance to provide the borrower with the best product that fits their need. We have fast underwriting turn times and we are able to close loans quickly. Our rates and loan programs are very reasonable, although not always the most aggressive when compared to our peer group. The focus upon building relationships through service while making sure our members and lending partners are clear on what our market niche is has lead to our success as well."
"We have not participated in competing with other credit unions when they are in a rate war," Anderson continued. "We have found this be a practice that is not right for Advantis. We certainly have lost some indirect auto business as a result of our rates being a bit higher than the market leaders. Since our value proposition is service we feel as though members and business partners will still send business to Advantis even when we do not have the best rate on the street. We also struggled initially in gaining first mortgage referrals from the real estate community as our mortgage loan officers began to market externally. It took a while longer than anticipated to have the Advantis name associated with real estate first mortgage loans."
