RALEIGH, N.C.-On Feb. 26, Coastal Federal Credit Union will close its three-branch network in the Charlotte area as part of its strategy to focus on and expand operations in the Raleigh-Durham market known locally as the "Triangle."
Marketing Communications Manager Joe Mecca said the decision follows a recognition by Coastal Federal that the market into which it had expanded was different from the market in which it was founded 43 years ago as an IBM employees CU. CFCU expanded into Charlotte in the 1980s.
"Charlotte and the Triangle are two distinct markets," he said. "We had been operating in both for quite a while, but as the years went along we realized we wanted to concentrate on the Raleigh area."
Moreover, the Charlotte branches are geographically dispersed in a market in which bank competition is stiff. In Raleigh, by contrast, "we have a strong deposit base, good name recognition and get good return on facilities and branches here."
Coastal also will close a poor-performing branch in nearby Garner, N.C. on Feb. 26. Mecca said the three branches in Charlotte were not underperforming, "but we weren't going to grow there. We've been looking at our entire branch network for the last two years. We analyzed where they were located, where we could and could not grow. In the Raleigh-Durham market, we knew where we were performing."
Part of Coastal's expectation of success in the Triangle is the health of the high-tech sector here. IBM greatly reduced its presence in Charlotte 10 years ago, but there are still 10,000 IBM employees in the Raleigh market. In addition, Coastal serves several large SEGs in the Triangle, including Cisco, PC-manufacturer Lenovo, software-maker SAF and Progress Energy, a Fortune 500 company.
"North Carolina has been beat up quite a bit, but the Triangle is doing better than the rest of the state," said Mecca. "IBM just reported it had a great year. We have very good local relationships in the Triangle, but we have not been able to forge similar relationships in Charlotte."
After the four branch closings Coastal will have 15 branches, all in the Triangle. "And we intend to keep growing here," Mecca said. "We've been upgrading branches with Express Tellers [see related story], and we are replacing a high-volume storefront branch in a shopping center. We are constructing a freestanding branch just down the street to replace it."
Coastal intends to replace one other branch with a new structure by the end of this year. In 2011, the plan is to start filling in gaps where the credit union does not currently have a branch presence with new branches.
