FORT LAUDERDALE, Fla.-JetStream FCU has seen more than its fair share of turbulence.
In 2009, the now $133-million JSFCU was reporting negative loan growth, negative member growth and, not surprisingly, negative net income. Amazingly, employees were still being paid bonuses based on "profit-sharing."
All of that has changed. In 2010 it returned to profitability, after cutting expenses by $500,000 annually. In 2011, the Miami-based Jetstream saw 5% membership growth, 20% loan growth and 320% net income growth (even if it was $400,000).
The person who has overseen that turnaround is Jeanne Kucey, who outlined for attendees at the CUNA CFO Council Conference just how JetStream put the tailwind back in its operations. The strategies it deployed included driving new efficiencies through technology, cutting costs by reviewing contracts with vendors, better developing employees (including hiring its first-ever trainer and dumping many of the policies and procedures it had in place), developing new lending relationships, adding products and services, and what Kucey called "strengthening the inner circle."
For large credit unions, much of what JetStream did in technology may seem so "1990s," according to Kucey, but for small and midsize CUs lacking resources, "it was slower to reach us."
One technology step included adding an employee Intranet to improve internal communications. Before the Intranet, "The VP of marketing would develop a lending campaign without even talking to the VP of lending," said Kucey, who joined JetStream after terms with a number of other CUs, including San Diego County CU.
Kucey said that among her first discoveries was that there was much internal work to be done before the grander projects could be undertaken. "I thought I'd come in and implement a sales and service culture, and found we had to start elsewhere."
The Trail To Service Success
Among the "elsewhere's" was cutting two staff positions and investing in training. Kucey said he hired the CU's first full-time trainer away from the former Eastern FCU, and began with training in policies and procedures. That has led to the introduction of the "Trail to Service Success" program in 2011 that has laid the groundwork for a cross-selling and onboarding program in 2012.
When Kucey came aboard the credit union, which was operating in the red, she was surprised to learn it was still offering "profit sharing" bonuses to employees, even though there were no profits to share. To reduce expenses further, JetStream FCU eliminated short-term disability but shortened the waiting period for long-term disability. It limited vacation accruals to 30 days and allowed only one week of vacation to rollover each year. In addition, employees' share of insurance premiums has increased to $25 per pay period from $15.
On the member-facing side of the operation, JetStream has developed loan products that include a Federal Furlough Relief Loan (for federal employees-it was founded to serve the FAA), developed a first-mortgage purchase program, re-established prior dealer relationships, added business services, a business loan participation program, and an internal auto loan recapture program. Business services and student loans are pending.
Another big change for JetStream: it obtained a low-income designation and CDFI certification. "We found that 75% of our members qualify as low income," said Kucey.
JetStream received first CDFI grant of $5,000 in 2011, and has a grant request in place for $1.5 million in 2012.
All of that has required one other fundamental, according to Kucey: top-notch management. What Kucey referred to as "strengthening the inner circle" has meant hiring a new EVP/CLO and a new EVP/COO. "One lesson I've really learned is the value of the inner circle and investing in the right people. It costs more but really pays off."
Case in point: a new branch manager at its facility in Puerto Rico has overseen loan growth to $3 million from just $250,000 a month.
