How Assessments Helped One CU Grow Its Loans

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IOWA CITY, Iowa-University of Iowa Community Credit Union CEO Jeff Disterhoft wasn't surprised to see his CU listed recently among the leaders for average annual growth. What surprised him, he said, was that their numbers weren't higher.

"I'm surprised we were only 12.5%," he said. "I would have guessed somewhere closer to 15%."

The $1.18-billion CU finished fourth in terms of membership growth, according to data from Callahan & Associates, at 12.54%.UICCU serves more than 81,000 members.

Disterhoft explained that while some of the CU's strong growth can be attributed to a 2010 charter expansion-which saw its FOM jump from 17 to 33 counties-much of the growth has also come about because UICCU used NCUA's assessments as an opportunity to streamline its operations.

"When NCUA announced their assessments, we really took that as an opportunity to become even more efficient at what we did," he said (see "Revenue Enhancement Team Paying Dividends," July 5, 2010). The credit union has seen earnings rise by as much as 2% per month, which has allowed it "to be extremely aggressive on the pricing standpoint," said Disterhoft.

While University of Iowa Community CU always had good expense ratios, NCUA's assessments served as an opportunity for the entire staff to redouble their efforts, he added. "Our world would certainly be easier without the assessments, but as the old saying goes, never let a good crisis go to waste."

Along with all that, however, a singular focus on growth has helped UICCU achieve its recent results. "We're a credit union that's focused on growth," said Disterhoft. "I know a lot of credit unions are and say they are, but there are a lot of things that can distract you from that focus, whether it's risk management, building relationships with your sponsor group or any of 1,000 other things. But we stay exclusively focused on growth; that's our core objective. Everything we do emulates from that, and we reward people based on growth."

The CEO emphasized that accountability is key, and all staff are measured against a Branch Performance Index, which uses an Excel spreadsheet to track core metrics such as loan and deposit growth, and what he called "the three C's"-the percentage of membership that has a credit card, car loan and checking account with the CU.

The Branch Performance Index, said Disterhoft, is understood and incentives are available to all staff, and they can see in aggregate how they've done at the branches and how those metrics tie up to the credit union's corporate goals. "It sounds very simple, but it makes sure that everybody's singing out of the same page of the hymnal. That consistency that permeates the entire organization is a huge plus for us to make sure we're all pulling in the same direction."

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