MECHANICSBURG, Pa. — Bob Marquette, CEO of Members 1st FCU, is big on attitude and helping members better their financial situation.
But he also stresses the importance of having fun and being approachable — both for members and the at his $2.6 billion credit union.
Marquette who was named NAFCU's CEO of the Year for credit unions with more than $250 million in assets, and he said that leading Members 1st through a period of strong growth was key to that selection.
"I've always been of the belief that if you're not growing, you're dying," said Marquette. "So growth has always been a key part of our strategic plan, and we constantly are pushing out our market area and developing solid relationships throughout the communities we serve."
Lots Of Growth — Including Branches
As part of that growth, Members 1st has posted annual net income growth averaging $20 million each year for the last several years, along with non-interest income streams of $30 million or more a year.
Members 1st has also seen robust gains in loan growth (nearly 10% last year), compound asset growth of 11.6% per year since 1997 (when Marquette took over as CEO), membership growth 2.4 times higher than its national peer group and more.
One area of growth that might be controversial — but which Marquette stands by — is a deepening branch footprint, which has grown from about a dozen branches in 1997 to 59 branches today.
The credit union offers its members mobile banking, remote deposit capture, online bill-pay and other self-service e-channels, but Marquette insisted the business case for branches is strong.
"Our transactions in our branches are not decreasing," he said. "If all of these predictions [about e-services signaling the death of traditional branching] were true, you'd see decreases in branch transactions. It ain't happening."
He added that not only do branches help for serving members with business accounts at the credit union, but branches also help solidify relations and help the CU build its presence within the community.
"That's how I justify our continued strategic focus on deploying branches," said Marquette. "It pushes out your market area. All of our branches have the same look and feel, so as people drive by them it reinforces the fact that we're convenient and we provide service."
Marquette pointed out that PNC — a major player in the Central Pennsylvania banking landscape — has indicated that it plans to convert many of their branches to remote teller kiosks. "We can't wait!" he said. "It can't happen quick enough for us. Because all of those people that liked branches, they're going to come to us."
Student Lending
Members 1st is also in the private student lending market, having begun working with CU Student Choice about four years ago. The credit union has nearly doubled that part of its portfolio in the last few years, growing from $26.4 million at the end of 2011 to $48.3 million as of its March 2014 call report.
"We may have doubled it, but doubled is relative to the dollar amount," said Marquette. "it's not a huge product for us, it's another way of rounding out all the products and services."
Despite that growth, Marquette said that the credit union is concerned about the possibilities of a student lending bubble. But, he said, college grads have been burdened with student debt for a long time.
What makes things different now, according to Marquette, is the media highlighting this issue, which "might have built a mindset with some college students that this is unfair and maybe I should walk away from it. What concerns us more is some of these politicians talking about no longer excluding student loans from bankruptcy. When you marry those two issues together, it does create some concern. Do we want to stay in the private student loan market or simply refer those members to another source; basically sell off the private student loans?"
But even as Marquette's institution contemplates exiting that market, he stopped short of saying it's a market other CUs should avoid.
"Every credit union has to make their own choices, but it's obviously an area of risk and if a credit union isn't at least considering the risk involved relative to their overall loan portfolio and net worth, shame on them," he said. "I think every credit union should take a close look at student lending and say 'Should we really go down this road?'"
NAFCU cited Marquette's management style and passion for getting the best out of employees at all levels of the organization when granting this award. So when it comes to hiring, Marquette said that, for him, attitude is just as important as aptitude.
A Unique Philosophy
"My management philosophy is that no job is more important than any other in our organization — including mine. I strongly believe that," Marquette said, noting that while all employees are pushed to do their job to the best of their abilities, it's also a relaxed, somewhat informal workplace.
"I tell [employees] to call me Bob. If you call me mister or call me sir, I'll rip your tongue out," he joked. "We like to have fun." As part of that mindset the credit union holds annual events such as a holiday gala each winter and even has themed Halloween costume contests each year.
Last year the theme was "Alice In Wonderland," with the CEO dressing up as the Cheshire Cat. In previous years he has dressed up as Elvis and a sumo wrestler.
"We had pins that we wore that said 'Wrestling with your finances? Members 1st can help.' We like to have fun, we like to be down to earth and we like to be approachable."
That willingness to communicate is key to the credit union's success, emphasized Marquette, and it applies to both members and staff.
"Make sure that everyone is on the same page, and explain things in a way that everyone can understand and in a way that people understand the value of it," he said.
One other strategy he advised is to not be afraid to take risks.
"Look at things from a long-term perspective. Our insurance agency that we formed five years ago is still not profitable. But it's getting more profitable. It'll become profitable eventually, and when it does it's like an annuity. It's an income stream. So we're very patient."
