MARSHALL, Mich.-Historically a mortgage shop, Marshall Community CU had to make major changes when the real estate market crashed, and since 2009 has diversified its product mix and focused on cross-selling to great success.
"We're really focusing on building those strengths and having that relationship with the members," explained CEO Heather Luciani, adding that with 9,000-member, $148-million CU is fairly operationally efficient, "so we have to try to capitalize on opportunities we have with the members and show them the benefits they can get from working with us."
Those strategies include calculators to help members better understand how much they can save at the CU, but also "we just got better at proactively driving the conversation," said Luciani.
Credit card penetration has increased in recent years along with other offerings, and Luciani noted that "We've gotten good at saying 'We're a good deal, and what you have isn't.'"
One tactic that has also helped, she said, is a relationship it began with Raddon Financial Group in 2009. Marshall Community CU was recognized in the most recent round of winners for Raddon's Crystal Perfromance Award for CUs with assets of less than $500 million. Crystal Awards are based on a scorecard of various factors, such as growth, income, efficiency and margin management.
Marshall Community saw 4% membership growth during 2012, up from 3.5% in 2011. Checking penetration rose by more than 7% in both 2011 and 2012 thanks in part both to Bank Transfer Day and to Bank of America recently leaving the Marshall market.
"It was a location that was right in downtown Marshall ... so all of those people had to go find somewhere else" to do their banking."
MCCU currently has an average of 3.76 products per household.
Containing Costs
Marshall Community continues to offer mortgages, but it sells those loans on to the secondary market while retaining the servicing of those loans. Luciani noted that loan growth at the CU has technically remained flat, but "if you look at the numbers for everything we service, plus our portfolio, that's increased 7%."
Luciani's team has also spent the last three years looking at cost containment, including "constantly focusing" on renegotiating vendor contracts. Additionally, CU officials review the benefits structure each year a cost-saving measure.
"We've looked at changing networks, changing deductibles, and working with our staff as to what's important to them that can save the credit union some money without them feeling like they're taking a hit on the quality of their benefits."
Work structures have also been changed, using attrition to transition all tellers working full time to a combination of full-time and part-time tellers "so that we can cover peak time, but also understand that we don't need all of the tellers there on Monday morning at 10 a.m."
Marshall Community has also changed its pricing strategy on deposit, lowering its cost of funds by moving from being a market leader to pricing near the market's midpoint.
"On the loan side we're a bit more aggressive, just because we have the liquidity," said Luciani. Business lending has also become a strong part of the CU's portfolio, particularly in the last five years. That portfolio saw 12% growth last year. Overall, business lending makes up about 13% of the CU's loan portfolio.
Non-interest income has increased from $1.8 million in 2011 to $2.18 million in 2012, in part as the result of revenue generated by an investment advisor for members.
Sustainable Changes
"We have a relationship with Harbor Investments, and they've added another person here, so we're focusing on that in 2013," said Luciani. Part of the goal is to appeal to older members living on a fixed income who want to improve their returns. MCCU has worked with the advisor for seven years, but only brought that person on full time in 2012 and has only recently begun to get aggressive with advertising the service.
"Our objective is that we're looking for sustainable changes, whether it's expense reductions or income opportunities," said Luciani. "It's really easy to panic and just cut a bunch of expenses, but it's important to look at if you can keep that up. People get tempted to say 'We're going to cut out training, going to cut down on marketing,' but those things aren't sustainable. ... We don't want to hamper other efforts in other areas by making changes that aren't realistic in the long run."
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