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CEO: Low interest rates a challenge, 2013 to bring opportunities

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FARMERS  BRANCH, Texas (12/28/12)--Compressed interest margins stemming from the low-interest-rate environment is a huge challenge for credit unions in 2013, but there are also opportunities, according to the chairman of the Texas Credit Union League.

"We make most of our money on the spread, and it's important to maintain that income stream to better serve members," said Paul Trylko, league chairman and president/CEO of Amplify CU, a $612 million asset credit union based in Austin, in the league's newsletter, LoneStar Leaguer (Dec. 17).

The Texas league is asking CEOs in the state what they see as the biggest challenge and opportunity for 2013, said the Leaguer.

"We all need to manage, diversify our portfolios to better serve all of our members, effectively manage risk, and earn yields that support our long-term need to grow capital," Trylko said.

The biggest opportunity for 2013 will be attracting young people--both as employees and members, he said, noting that the movement has "a great group of next generation leaders already in our ranks that are invested in the cooperative credit union business model.

"We just need to ensure that they have the culture and environment that enables them to serve well, make a difference, give back to the community and be part of something bigger than themselves," Trylko told the league.

That means including a good compensation system and a progressive way of doing business. "Current leadership has to develop the next generation, give them guidance and get out of the way to allow them to grow," he said.

Having younger employees will make it easier to attract younger members, he said, but that isn't enough.  "We have to look to the trends and do business in a way that resonates with the next generation," Trylko  told the league.

"We have to bring innovation and new access channels to the table to attract and retain the member of tomorrow. The speed of change is increasing and we, as an industry, need to push forward and lead--opportunity awaits," he said.

CU System briefs (12/28/2012)

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  • OSCODA, Mich. (12/28/12)--A suspect in the Dec. 20 robbery of Oscoda, Mich.-based Northland Area FCU's Skidway Lake branch was hospitalized after rolling his vehicle over in a field during a police chase. The unidentified man, 50, suffered a collapsed lung. Police say he will be arraigned next week after his release from the hospital. The incident occurred at about 2:15 p.m. when a man allegedly brandished a handgun and robbed the credit union, then fled to the car. All the money taken and a weapon have been recovered, said policy (The Ogemaw County Herald Dec. 26) …
  • DUNEDIN, Fla.(12/28/12)--The City Commission of Dunedin, Fla., has approved a financial incentive package of $127,000 to try to persuade Clearwater-based Achieva CU to choose the city as the location of its new corporate headquarters. The approval was unanimous (Tampa Bay Times Dec. 23). Under the agreement, the city would waive $21,200 in building review, inspections and five years' business tax and licensing costs; award the credit union matching grants of $5,000 for design assistance, $10,000 for demolition and $42,500 each in fiscal years 2013 and 2014 for façade improvements; and pay the $5,835 legal bill for drawing up the contract. The credit union is remodeling a former Nielsen Media Research call center and expects it to be completed in the spring …
  • HARRISBURG, Pa. (12/28/12)--Two credit union officials and several members of Philadelphia area credit unions are represented on the Steering Committee of the Philadelphia Area Cooperative Alliance (PACA), said the Pennsylvania Credit Union Association (PCUA)(Life is a Highway Dec. 27). The committee includes Mark DeYoung, vice president of Eastern member service, Sun FCU; Diane Childs, vice president of marketing, Sb1 FCU; and several members of Philadelphia FCU. The committee will oversee PACA's incorporation, bylaws and member recruitment. The membership organization, developed earlier this year, is a network of cooperatively owned businesses and allies working to support development of new co-op businesses, provide services to existing co-ops, educate the public about co-ops, and advocate for co-ops with elected officials, said PCUA. Cooperatives, including credit unions, are celebrating 2012 as the United Nations International Year of Cooperatives …
  • BARTLESVILLE, Okla.(12/28/12)--The Board of Directors of 66 FCU, a $636 million asset credit union based in Bartlesville, Okla., announced last week that the credit union will adopt a new name in 2013 (Bartlesville Examiner-Enterprise Dec. 23). It has hired a nationally recognized naming and branding firm to assist in developing the new name. The credit union has had a history with Phillips Petroleum Co. since 1939 and more recently with ConocoPhillips, said 66 FCU President/CEO Kelly Diven. "However, a new name will help convey that we serve not only these two employee groups, but others as well," Diven said, adding a new name would help position the credit union for future growth and financial strength. The credit union also serves The University of Kansas, Tyson Foods and other select employee groups …

End of the year brings spurt of dividends payouts

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MADISON, Wis. (12/28/12)--Several U.S. credit unions nationwide have paid out end-of-the-year dividends to their members.

They include:

  • Navy Army Community CU in Corpus Christi, Texas, with $1.49 billion in assets, announced a 12% bonus dividend, which equates to 2012 dividends paid to date--excluding Liberty Checking dividends--multiplied by 12%.
  • Guardian CU in Montgomery, Ala., gave back more than $800,000 in the form of interest rebates and dividend bonuses. The $226 million asset credit union said roughly 23,000 members received money back in early December, with one individual receiving more than $3,300.
  • Birmingham, Ala.-based Acipco FCU, with $136.7 million in assets, said it paid $1.7 million in bonus dividends and interest rebates to it 7,300 members. That comes to an average payout of $232 per member.
  • DFCU Financial in Dearborn, Mich., announced a $21 million "Special Patronage Dividend"--the same as last year's payout. That marks the seventh consecutive year that the $3.3 billion asset credit union has paid the dividend.
  • Eastman CU, a $2.63 billion asset credit union based in Kingsport, Tenn., reported it paid a $5 million "extraordinary dividend," up from $4 million in 2010. This year marks the 16th consecutive year the dividend has been paid to members.
  • Emergency Responders CU, with $16 million in assets and based in Winston-Salem, N.C., will return a 5% interest rebate to current members who paid interest on loans in calendar year 2012, with the rebate posted in their savings account.
  • MECU of Baltimore members received loan interest rebates on Dec. 5 totaling $1.14 million or 6.25% of the interest paid between July1 and Nov. 30.  On Monday, MECU will pay its members extraordinary dividends for the period of July 1 to Dec. 31. MECU has paid its members a cash bonus every year since 1981. For all of 2012, MECU will have returned $4.25 million to its members.
  • Scott CU, in Edwardsville, Ill., is giving more than $1.2 million back to active members in the form of a 3% Annual Percentage Yield Bonus Dividend and a 3% Loan Interest Rebate this month. The dividend and rebate were credited to members' savings accounts.
  • Utilities Employees CU in Wyomissing, Pa., a virtual credit union serving the U.S. utility and energy industry nationwide, will distribute a membership loyalty bonus of nearly $1 million to its nationwide membership at the end of the year.
  • K.C. Police, CU, Kansas City, with $100 million in assets, will pay a dividend--the first in its 78-year history--to members on Monday. It will distribute $200,000, with members receiving 7% of the sum of the interest they've paid on loans and interest earned on deposits.

Garden Savings FCU, Morristown FCU to merge Jan 1

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PARSIPPANY and MORRISTOWN, N.J. (12/28/12)--Garden Savings FCU, headquartered in Parsippany, N.J., and nearby Morristown  (N.J.) FCU announced plans to merge, effective Tuesday.  

Click to view larger image Lou Vetere (left), president/CEO of Garden Savings FCU, shakes hands with Richard Myers, president/CEO of Morristown FCU, after the planned merger of the two credit unions was announced.  (Photo provided by Garden Savings FCU)

The credit unions will continue to operate under the name of Garden Savings FCU and operate full-service branches in Parsippany, Morristown, Newark, Dover and Murray Hill.

Garden Savings FCU, established in 1968, has more than $212 million in assets and more than 15,000 members from more than 100 sponsor employer groups, including Alcatel-Lucent.

Morristown FCU, established in 1953, has $65 million in assets with nearly 6,000 members primarily from its core sponsor group, Honeywell. The merger was approved by the Morristown FCU membership on Nov. 27, and signed and made official by both respective boards of directors on Saturday.

"This merger has the best interests of our members in mind for both the short and long term," said Richard Myers, president/CEO of Morristown FCU. "Both credit unions are based in Morris County and the resulting credit union will be diverse, flexible and dynamic."

"Morristown FCU has been a healthy, successful credit union for six decades," said Lou Vetere, Garden Savings president/ CEO. "To combine our products, services, locations and membership is an opportunity that will strengthen both credit unions in many ways."

Purchase of NH bank by CU is official today

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GARDNER, Mass. (12/28/12)--A Massachusetts-based credit union's purchase of a New Hampshire bank--said to be the first acquisition in the U.S. of a stock savings bank by a credit union--becomes official today in a $6.4 million deal.

Monadnock Community Bank (MCB), based in Peterborough, N.H., is a former state-chartered credit union that was converted to a federal savings bank in 1996. It is being purchased by GFA FCU, Gardner, Mass., in what the credit union says is a first (WBJournal.com Dec. 27).

The bank was initially chartered in 1971 as AWANE CU and served the Automotive Wholesalers Association of New England Inc. It opened its retail banking office in November 1997 and changed its name in October 2000.

GFA announced it is developing a new marketing look and using "Feel Better at GFA" rebranding messages to communicate the advantages of joining the credit union.

The bank office will be the ninth full-service GFA branch.  Seven are located in north central Massachusetts and two in New Hampshire.

"Many of our customers have shared positive comments about joining a credit union--they are excited about the expanded products and services that GFA can offer them," said William M. Pierce Jr., president/CEO of MCB, in a press release.

Another credit union, in Wisconsin, also is applying to buy a savings bank.  Landmark CU, New Berlin, Wis., filed applications in September with state and federal regulators to acquire Hartford Savings Bank, a state-chartered mutual savings bank headquartered in Hartford, Wis. (News Now Sept. 26).

NY CUs continue record asset, membership growth

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ALBANY, N.Y. (12/28/12)--New York credit unions continued to show an upward growth trend for assets, shares, members and loans in the third quarter of 2012, said the Credit Union Association of New York (CUANY).

Click to view larger image Click for larger view
New York credit unions exceeded national averages in all four of those categories--setting new records of $61.5 billion in assets and nearly 4.8 million members, said a new Credit Union Performance & Trends Report from Callahan & Associates.

"This growth reflects the changing attitudes consumers have towards big banks," said William J. Mellin, CUANY president/CEO. "It also shows how credit unions have stepped up their efforts to increase awareness among consumers of credit unions as safe financial institutions that provide both good value and promote thrift."

Other growth highlights include:

  • New York credit unions had annual outstanding loan growth of 8.1% in September 2012, nearly double the national average of 4.2% over the same time, CUANY said.
  • The average member relationship (the outstanding combined loan and share/savings balances per member, excluding member business loans) also increased to $17,341 at the end of the third quarter.
  • Credit unions in New York saw share/savings balances increasing at 8.8%--faster than the national average of 6.2%--as regular shares, money market accounts and share drafts grew at a double-digit annual pace.
  • Capital levels remain high at New York credit unions, at 11.3% of assets. That is a higher level than New York banks and thrifts, as well as credit unions and banks nationwide, CUANY said.
  • Business loans on the books of New York credit unions increased 16.9% from September 2011, with member business loan originations totaling more than $1.9 billion in the first nine months of 2012.

Community service highlights CUs' holiday spirit

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MADISON, Wis. (12/28/12)--
Click to view larger image Northwest FCU President/CEO Gerrianne "Winky" Burks, posing as Cindy Lou Who from Whoville, waves to the crowd during the 67th Annual Tree Lighting Ceremony and Christmas Parade in Manassas, Va., earlier this month. She joined 16 other credit union staff, portraying the Whos of Whoville in the Grinch-themed float, "Don't Let Checking Fees Steal Your Christmas." (Photo provided by Northwest FCU)
While many credit unions collected toys to make children's holidays brighter, other credit unions demonstrated their holiday spirit at community-wide events, raising the visibility of their credit unions while doing something special for their communities--and having some fun, too.

Manassas, Va.'s 67th Annual Tree Lighting Ceremony and Christmas Parade featured staff from Herndon-based Northwest FCU (NWFCU), the event's official sponsor, portraying the Whos of Whoville in the Grinch-themed float, "Don't Let Checking Fees Steal Your Christmas."  NWFCU President/CEO Gerrianne "Winky" Burks, appeared as Cindy Lou Who, and 16 other staffers were the Whos of Whoville.

The parade is the largest parade in Northern Virginia, drawing nearly 60,000 spectators and more than 2,000 participants, said the credit union, which has been a parade sponsor since 2009. "This is a great way for Northwest to support the communities we serve while building awareness--plus the response from the crowd for Cindy Lou is heartening," said Burks.

The credit union and the Northwest FCU Foundation also joined in as sponsors and volunteers for an afternoon of food, fun and friendship for local senior citizens. The 21st Annual Senior Holiday Luncheon, drew more than 150 people to the Manassas campus of Northern Virginia Community College. Each guest received a meal and a warm winter scarf.

Other efforts from credit unions:

  • Click to view larger image Riverside, Calif.-based Altura CU staff  decorated a "Holiday Wine & Spirits" Christmas tree that was sold for $3,500 at the 23rd Annual Festival of Trees. The proceeds go to the Riverside County Medical Center's Pediatrics Units.  Decorators include, clockwise from left: Gaby Perez, Jacque Thurman, Irene Simone, Cindy Thomas, Tina Covington and Karena Chum. Simone and Chum coordinated this year's efforts by Altura. (Photo provided by Altura CU)
    Altura CU, Riverside, Calif., continued its holiday tradition of raising funds for Riverside County Medical Center's Pediatrics Units as part of the 23rd Annual Festival of the Trees, where 50 local organizations, including Altura, decorate a tree that is sold to businesses as part of the event. Proceeds go to the medical center. Altura staff's "Holiday Wine & Spirits" tree was sold for $3,500. The five-day event typically raises about $500,000 and attracts more than 30,000 people. It  is the main fundraising event for the medical center and a major holiday event for the community. Irene Simone, branch manager, and Karena Chum, business development officer, coordinated Altura's efforts this year. Altura also sponsored Story Time With Santa for children.
  • Lathrup Village, Mich.-based Michigan First CU and Michigan First Foundation donated $500 for needy children, collected $660 and more than 40 new and used coats for an annual coat drive, participated in 96.3 WDVD's "Christmas On Us" to provide $1,000 in gifts and services for five Metro Detroit families, hosted a blood drive for the American Red Cross, and continued its tradition of bringing Santa into its branches during December.
  • Freedom CU in Warminster, Pa., hosted two visits from Santa and Mrs. Claus at its Warminster and Northeast branches. More than 100 members and their children had their photos taken with Santa. Freedom CU's employees were on hand to print the free photos and hand out candy canes. Freedom also collected boxes of nonperishable food items and toiletries and donated $400, all for St. John's Pantry.
  • Financial Partners CU, Downey, Calif., sponsored the City of Downey's annual Holiday Parade by providing $5,000 to the parade as its major sponsor. The event was held Dec. 2. "We have been a visible member of the Downey community for the last 74 years," said Financial Partners CU CEO Nader Moghaddam, noting that the credit union has "seen the community develop economically and culturally into the wonderful place that it is today. Our sponsorship is a demonstration of our commitment to the future of this dynamic community."
  • Virginia CU, Richmond, Va. used the holidays as an opportunity to provide budgeting advice to the community in its press release "How to stretch your dollars during the holidays." It provided advice on stretching the budget (don't shop for yourself, keep a list of what you have bought, make your own gifts); spending (research for the best deals, use coupons, use statement rewards, keep receipts and ask for refunds); and saving for next year (open a separate savings account, keep records of what you spend this year, and sign up for an automatic savings program based on debit card purchases).
  • Click to view larger image Employees from TruMark Financial CU, Trevose, Pa., donated 670 pounds of food to the Food & Nutrition Network, a division of the Bucks County Opportunity Council, Lower Bucks County. The donated food will provide 509 meals for families living below the poverty level. (Photo provided by TruMark Financial CU)
    Los Angeles FCU employees volunteered to assemble food crates at the Los Angeles Regional Foodbank. They worked with several groups to produce 800 food crates totaling 20,000 pounds of food that included fresh corn, carrots, cabbage and bell peppers distributed to more than 500 needy families in L.A. County. After assembling the crates, LAFCU President/CEO John Dea presented L.A. Regional Foodbank CEO Michael Flood with a $1,000 donation, to be used for hunger relief in the county.
  • Pensacola, Fla.-based Gulf Winds FCU committed $25,000 to help MANNA fulfill its mission of feeding the hungry. The donation was presented to MANNA last month at its "Fill the Mayflower" Holiday Food Drive at Cordova Mall in Pensacola. The non-profit organization distributes the food through six pantries in Escambia and Santa Rosa counties.  "We are experiencing unprecedented demands in service and have had a food shortage," said MANNA Executive Director DeDe Flounlacker. "This generous donation by Gulf Winds literally had our team jumping up and down with excitement because we know the impact it will have on our efforts and the communities we serve."