Desert Financial Leads With Heart To Conquer New Markets

The Arizona cooperative commits time and money to fundraising, grants, and activities that revolve around the idea of giving back.

 
 

Top-Level Takeaways

  • Desert Financial engaged the Prescott, AZ, area through indirect lending, community donations, and face-to-face meetings before opening its first branch there.
  • Accounts and membership have both grown rapidly, setting the stage set for a further move north into Flagstaff.

Desert Financial Credit Union ($7.8B, Phoenix, AZ) knows how to make a good impression. So good, in fact, that the cooperative won a “best local financial institution” award for the Prescott, AZ, area before it even opened a branch there.

Desert Financial has served its Phoenix home base since 1939, first as Arizona Educational Association #1 FCU, then as Desert Schools Credit Union, and finally as Desert Financial since 2018. The Valley of the Sun cooperative secured a statewide charter in 2020 and opened a supermarket branch in the Prescott Valley community in September 2021.

CU QUICK FACTS

DESERT FINANCIAL CREDIT UNION
DATA AS OF 9.30.21

HQ: Phoenix, AZ
ASSETS: $7.8B
MEMBERS: 379,097
BRANCHES: 47
12-MO SHARE GROWTH: 29.1%
12-MO LOAN GROWTH: 7.9%
ROA: 1.34%

The cooperative already employed a “Give and Grow” mindset to counter slowing growth as it contended with growing competition from local financial institutions and fintechs alike, and the new charter pushed the credit union to think deeply about where to expand next.

“We were growing membership at less than 1% a year,” says Cathy Graham, who has been with the credit union for 15 years, the past two as executive vice president. “We knew if we’re not growing, we’re going to decline.”

Leading With Relationships. Sharing Success.

According to Graham, Desert Financial includes “sharing success” as part of its core mission. That has long included committing time and money to fundraising, grants, and activities that revolve around the idea of giving back.

Cathy Graham, EVP, Desert Financial Credit Union

“It’s a virtuous circle that has really worked for us,” Graham says. “You give, the community recognizes your commitment, and it gives back. We started seeing more people choosing us.”

At the end of 2017, the cooperative had approximately 302,000 members and $4.3 billion in assets. That’s now grown to 378,000 and $7.5 billion, respectively.

“Before our rebrand [in 2018] we were growing at less than 1% a year,” Graham says. “Now, it’s been at 10% the past two years.”

In fact, the credit union has missed its monthly growth goals only once in the past two-and-a-half years, and that was during the crushing pandemic months of March and April 2020.

“From Phoenix you can basically grow to the south or to the north. Going north makes the most sense to us. And we’ll keep leading with our heart.”

Cathy Graham, Executive Vice President, Desert Financial Credit Union

Graham says a key component to the success of the “Give and Grow” strategy is aligning the entire enterprise in the effort.

“This isn’t something where you can just go to marketing to do a rebrand,” the EVP says. “Every single line of business here put together its own plan to align with the overall plan, which was to grow membership. Everybody got excited, and it’s worked out well.”

Moving To Prescott

Building relationships is at the heart of the strategy, and that’s what Desert Financial did to initiate its move into the Prescott area a hundred miles to the north.

“We did a lot before we ever opened a branch, beginning with indirect lending,” Graham says. “We signed up probably a dozen dealers. We’ve taken on 750 new accounts from that channel alone in the past month.”

A digital ad highlights Desert Financial’s adopt-a-teacher program, which helped the credit union introduce itself to its new market.

Digital marketing also has been a major tactic, but the biggest piece of all, the Desert Financial EVP says, has been connecting with people.

“We’ve made a lot of trips up there to meet with local officials and other leaders, who then introduce us to more local businesses and leaders,” Graham says. “It just keeps building.”

Kicking off these engagements, Desert Financial always asked how it could help. As a result, it got out into the community in a big way. The credit union participated in an Arbor Day program, planting trees in Prescott Valley. It also donated to local schools as well as to a Father’s Day Random Acts of Kindness program at a local golf course and to a Boys and Girls Club. It sponsored an Adopt-a-Teacher program and gave away gift cards at a grocery store.

A marketing piece from Desert Financial underscores the cooperative’s “Give and Grow” philosophy to the Prescott, AZ, market.

“We wanted to build engagement and relationships to show people and organizations there that we care about their community,” Graham says.

The tally so far in dollars is approximately $175,000, and the early returns are positive.

Residents picked Desert Financial in Prescott Living Magazine’s “2021 Best of Yavapai County Services” polling in the bank/credit union category. That was over the summer before the credit union had even opened its supermarket branch.

The first week its Prescott Valley branch was open, new members turned out to sign up.

“It was one of our top four branches in new memberships,” Graham says. “That’s unheard of for us. It usually takes quite a while for a new branch to really ramp up.”

An ad announces the imminent opening of Desert Financial’s new branch inside a Fry’s Food and Drug in Prescott, AZ.

And in the spirit of Give and Grow, the credit union donated $83,000 to local scholarships and organizations as part of the grand opening.

All this has reaped more than 5,000 new memberships so far, and the cooperative plans to continue its charge north. It will open a second branch in Prescott next year. Then, it’s on to Flagstaff, another 50 miles or so north.

“From Phoenix you can basically grow to the south or to the north,” Graham says. “Going north makes the most sense to us. And we’ll keep leading with our heart.”