“It turns out people still want branches,” says Gene Pelham, president/CEO of Rogue.
So much so, he notes, that the credit union recorded 40% growth in one market when it put a second branch there to accommodate consumer demand.
Today, Rogue is accommodating growth that has bumped its members per branch from 4,856 five years ago to 6,435 as of June 30, 2018. The average for credit unions with $1 billion to $10 billion in assets was 8,323 as of midyear, according to data from Callahan & Associates.
Rogue’s branch design emphasizes traditional service with the capacity to accommodate new self-service and consultative methods as member demand changes.
The investment has been significant. Rogue reported $63.9 million in land and building assets in the second quarter, compared with $34.7 million for other credit unions its size. Its ratio of land and buildings to total assets was 4.20%, the second highest in its asset class, which posted a second quarter 2018 ratio of 1.45%.
Meanwhile, Rogue’s second quarter ratio of operating expenses to average assets was 3.84%, 93 basis points more than its peer group of billion-dollar credit unions and 74 basis points more than the average for all U.S. credit unions regardless of size. Its efficiency ratio, however, was a healthy 73.64% and its ROA at quarter’s end was 1.36%, well above its asset-based peer group average of 0.97% and the national average of 0.90%.
And then there’s that impressive member growth.
BEST PRACTICE: GIVE MEMBERS WHAT THEY WANT
Rogue doesn’t force members to use technology they’re not ready to use. Members can choose between talking to someone live at the ITM screen or using the ATM functionality. They can also come in during expanded office hours.
“We haven’t had a quarter with member growth of less than 10% in quite some time,” says executive vice president Matt Stephenson. “That has a lot to do with how we’re serving our markets. We’re clearly benefiting from competitors who are forcing their customers toward delivery channels they don’t want.”
Giving members what they want is evident in the credit union’s new branch designs, which feature interactive teller machines outside and pods instead of teller windows on the inside.
3 Ways To Support Students
The Rogue Valley is home to some of the largest pear orchards in the country, but it’s cherry picking that has become a specialty at Rogue Credit Union, which uses its six student branches as a training opportunity for future full-time staffers. The grow-your-own relationship sustains Rogue’s roots as a teachers credit union while deepening its connection to the communities it now serves.
Here, Rogue employees offer tips for how to turn out the best performance from student branches.
Prime the employee pipeline: Rogue regularly holds hiring fairs where group interviews conducted by branch and assistant branch managers identify candidates for teller, MSR, and other positions. It helps, too, that students are aware of the program. “We’re in our third year at SOU, but our relationship with the high schools date back to the late 90s,” says executive vice president Matt Stephenson.
Don’t be afraid to ask tough questions. Rogue interviewers ask scenario questions that help show how the potential new staffer would handle a difficult member or escalating service problem. “That tells us a lot about how you would handle difficult situations,” says Jeanne Pickens, Rogue’s chief operations officer.
Give employees the opportunity to build on their student branch experience. Melissa Wood rose through the ranks as she worked for the credit union during high school and college and became lending services manager in 2013. “I’ve had the privilege of overseeing two student branches,” Wood says. “It was an honor to coach students through the same program that has given me so much. It’s rewarding to watch those students grow their professions inside and outside of Rogue.”
“We have too much traffic in our branches and our members aren’t there yet to change that way of doing business with them,” Stephenson says of the credit union’s decision to offer a traditional teller experience via the pods. “But when they are, we’ll be ready.”
The credit union also has expanded its Saturday branch hours and closes at 5 p.m. instead of 2 p.m. As a result, Saturday transactions have increased 54%, loans have increased 57%, and account openings have increased 61%.
The ITMs also enabled the credit union to efficiently expand serving members from 7 a.m. to 7 p.m. Although approximately 75% of that usage are ATM transactions, the ability to talk to a person when needed is crucial. And so is being able to see someone face to face.
“Our surveys show that 60% say they prefer using the express teller machines to walking into a branch,” Stephenson says. “But if they want or need to talk to someone inside the branch, we need to be there for that, too.”
According to Stephenson, 90% of Rogue’s member growth is coming from existing markets; 79% is from existing branches.
That’s happening while the average number of transactional branch visits per year has dropped from 17 to 13 in the past four years. Stephenson is quick to note that the credit union’s digital channels are its fastest growing, by far.
“We’re not putting all our eggs in one basket,” the Rogue EVP says, adding that Rogue recently updated its website, roguecu.org, and that a new internet banking platform will go live in January
“We’re not naïve,” Stephenson says. “The rest of the world sees something coming and has this knee-jerk reaction. We see it coming, too, but we’re not going to disenfranchise a lot of members right now because of something we see 10 years down the road.”
This article appeared originally in Credit Union Strategy & Performance. Read More Today.