The 2,700-Mile Aloha

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LAS VEGAS — One credit union's branch closure can sometimes be another CU's opportunity, and Honolulu-based Aloha Pacific FCU said it has found success 2,700 miles from home.

On Dec. 1, 2010, $724-million Aloha Pacific opened its first off-island branch in a location formerly occupied by Silver State Schools CU, which closed the branch as part of its reorganization. According to Kristopher Kono, Aloha Pacific's senior marketing manager, the Las Vegas area is home to a large number of Hawaiians, making the long-distance move a natural fit.

"We specialize in former Hawaii residents," he said. "They have to fall into one of our select employee groups or Hawaii groups. We have more than 1,000 different groups, so we are able to qualify many different people. We just tell them to give us a call."

Wallace Wantanabe, Aloha Pacific's CEO, called the new branch as a "great financial opportunity" in announcing the move to Las Vegas. Kono said the first three months have indeed proved to be fruitful.

"We have had a really good response. The branch is generating lots of loan inquiries and applications," he said. "We have done at least $1 million in business there, which is a pretty good start for just having opened and not doing much advertising."

The reason: people in Las Vegas are "looking for opportunities" and real estate prices have declined significantly, making homes more affordable, Kono continued.

"We have closed a good number of mortgage loans. We have done some auto loans, but our main focus is mortgages," he said.

Staying Away From Exotic Mortgages

Nevada has consistently remained at the top of most foreclosure rankings in recent years, making "Mortgage Loan in Las Vegas" seem like the title of a financial services horror movie. Indeed, the bones of many a lender are bleaching on the sand here. Asked what risk assessments Aloha Pacific performed before booking home loans in Sin City, Kono said the CU reviews all borrowers individually and is following its standard mortgage lending practices as part of its due-diligence.

"We do not offer any exotic mortgage products, and require a down payment of 10% to 20% at a minimum," he said. "Applicants must have sufficient income to cover their monthly payments. While the recent decline in property values offer a level of safety, our lending is not based on the expectation of higher prices. Our goal is to help members by only lending what they can afford. No one can predict the exact bottom of any market, but we are confident in the long-term prospects for Las Vegas and its people."

Smooth Transition

The switch from one credit union to another encountered some "minor difficulties" involving equipment, Kono recalled, "but other than that, the transition has been smooth."

The Las Vegas branch has an ATM, a coin counter and participates in shared branching. Video conferencing links the Vegas branch to the nine Aloha Pacific branches in Hawaii.

Elections are in progress for the Aloha Pacific FCU board. Whereas in the past Aloha Pacific members who retired to or otherwise lived in Las Vegas were left out of the process, Kono said they now can vote at the branch through special machines.

"Our goal is to build lasting relationships in Hawaii and beyond," said Watanabe. "The Las Vegas branch is just one part of our growth strategy, which we hope will sustain us for many years to come. We are bringing Aloha to Vegas."

Chartered in 1936 by city employees, Aloha Pacific FCU is the third-largest credit union in Hawaii. Membership is open to employees of the city and county, members of the Hawaii Government Employees Association, and numerous SEGs and their immediate family.

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