LIVE OAK, Texas-When times are tough in the short term, credit unions that want to succeed in the long term must go on offense and pound the pavement for business more than ever.
That's the advice of Randy Smith, CEO of Randolph-Brooks Federal Credit Union. Though initially caught off guard by the severity of the current recession, an aggressive line has helped keep employee morale up and both lending and deposit volume strong.
"[The recession] has actually been a wonderful thing for us because people started to look for stability and we've had a rush of new business as a result of this," he said. "New member growth is double what it was two years ago, deposits are growing 25% to 30%, and the same thing on lending side."
Smith credits a powerful advertising campaign and significant reductions in RBFCU's loan pricing for spurring lending demand in a market in which many financials are scrambling to find quality borrowers who want a loan. Lending across the board is up 26% YTD over 2008 at the $3.35 billion institution.
"If business is starting to take a downturn you need to put more salesmen on the street," he contended. "We're everywhere in the community. We're in the newspapers, we're on television, we're in movie theaters; people know they can come here and get a good deal. We looked at the interest rates and we said 'We can't invest in a government bond and make any money, so let's put it all on the lending side.'"
Eye On Bottom Line, But …
While other credit unions have been forced to cut benefits or even employees, Randolph-Brooks FCU is still having holiday parties, bringing on additional staff and even buying branches that have been vacated by other financial institutions.
The credit union is still watching the bottom line as evidenced by its usage of the efficiency-inducing Kaizen streamlining method, but it also continues to send staff to conferences, believing attendance is essential to finding new ways of doing business that can pay for themselves many times over, he said.
"You cannot build a strong credit union by cutting expenses," Smith argued. "You're not going to build a strong credit union by sitting behind your desk."
To be sure, the economy in Texas is generally considered to have been sheltered from the worst of the recession, but Smith believes that the results Randolph-Brooks FCU are seeing can be replicated in other markets. The willingness to make bold moves is what makes the difference between success and continuing to struggle, he argued.
"Try something a little unusual. Don't find out what everyone else is doing; go out and try something else."
