LIVE OAK, Texas-Randolph-Brooks FCU is growing substantially in members, assets and loans and humbly says it's not the result of rocket science.
The secret isn't so secret, says the credit union, which cites simply giving members a great deal all the time-from free checking to cash-back debit rewards to a sub-2% auto loan. "It's a back-to-basics approach," said Sonya McDonald, SVP, planning and market development. "We strive every day, and all our employees are aligned to the goal, to do whatever we can to provide exceptional value to our members."
Membership increased by 7% in 2011 and 4% in 2010, moving from 37,602 members less than two years ago to 40,115 today. Asset growth has been even stronger, standing at $4.5 billion at press time compared with $3.5 billion at the close of 2009-a 26% increase.
And in these tight lending times, loan growth is up 24% from 2009, including 11% growth this year. ROA in 2011 is a robust 1.83%.
McDonald said Randolph-Brooks has established "tremendous trust" and a close connection with the membership that generates word-of-mouth advertising that is second to no other financial in the area. "Our members like us, they are loyal to us, and they talk about us."
What is helping drive the favorable chatter is a no-fee checking account and a debit card that gives 10 cents back on every purchase. McDonald said the rewards program has helped the debit program take off. RBFCU has nearly 80% member penetration in checking and debit cards. "So if members come to us for a product, say a loan, they stay for the checking account and debit card. Last year our debit rewards returned $5 million in cash back and we will beat that total this year."
It's value like that which keeps the credit union top-of-mind with members, insisted McDonald. "Our fee schedule is less than one page. We don't charge for checking, and we have a $20 NSF fee that compares favorably to the $38 to $40 being charged by most banks here. When times were great people didn't worry much about the nuisance fees. Now times are different and that five to seven dollars a month adds up and people are noticing."
Members are also paying attention to a rock-bottom 1.9% auto loan rate for up to 66 months for A credit. RBFCU introduced the rate in June when it dropped its already-low auto loan rate that hovered just above 3%. "When we dropped the rate we started adding even more checking accounts, debit cards, and members," McDonald explained.
6,000 New Members-In A Month
This August RBFCU signed up 6,303 new members, compared with 4,959 new members for the same period last year. "We attribute the results to the auto loan rate," stated McDonald. "For the first time we have surpassed the billion-dollar mark in our auto loan portfolio."
Randolph Brooks heavily markets auto loans, using billboards, direct mail, and the Internet. But what may be surprising to some CU CEOs is RBFCU is getting its results without any indirect auto lending. In June auto loan dollars were up 43% over June 2010, up 57% in July over the same period last year. August was 68% better than 12 months prior.
Thriftiness, too, is contributing to RBFCU's prosperity. The credit union has gone from 18 branches eight years ago to 39 today, and plans to add up to seven more in the next year. Even with the expansion the credit union's operating expense ratio is 2.93% and falling, dropping more than 50 basis points in the last year and a half. McDonald said that being efficient is part of the fabric of the credit union and that CEO Randy Smith meets with every new hire and delivers the message of the importance of using members' money cost-effectively.
"We have, too, what we call our process improvement department," said McDonald. "We look at all of our processes and make sure if it takes 20 steps to get from A to B, we look to see if we can knock out 10." The CU uses kaizen events (Credit Union Journal, Jan. 11, 2010), a fast-moving business activity aimed at continually improving all functions of an organization. It's the same process improvement strategies the Japanese used to gain market share on GM.
Summing up the success of Randolph-Brooks, McDonald said the credit union is a "well-oiled machine. Leadership has clearly communicated to everyone where we want to be. We want to be known in our markets as the best deal for our members, the best financial institution for service, and everyone is on the same page and gets that job done."
