The fact that the name Nevada comes from the Spanish word for “snow-covered” might not make much sense to many Americans until they visit the majestic hills of Carson City.
Named after Kit Carson, the frontiersman who led explorer John C. Frémont to this region in the mid 1840s, Carson City became the capital of the Nevada territory in 1861 and then later of the State of Nevada following its admission to the Union in 1864.
Nestled against the base of the Sierra Nevada mountain range, not far from Lake Tahoe, the city was a source of and shipping hub for gold, silver, and timber — all which played a major role in helping to fund the Union efforts during the Civil War as well as the general expansion and development of the American Southwest.
CU QUICK FACTS
Greater Nevada Credit Union
Data as of 03.31.15
HQ: CARSON CITY, NV
12-MO SHARE GROWTH: 14.42%
12-MO LOAN GROWTH: 20.39%
Times have changed nearly every aspect of the city, of course. Four-wheel drive SUVs sporting “Keep Tahoe Blue” bumper stickers have replaced covered wagons, and mountain bikers and other outdoor enthusiasts now populate old mule trails. Even the mines have given way to new industry, including a burgeoning tech scene attracted by the state’s business-friendly tax policies.
Yet the heart of Carson City remains as colorful, willful, and yes, sometimes wild, as the bands of horses that still roam the region’s hills today.
A prime example of this pioneering spirit is Greater Nevada Credit Union ($541M, Carson City, NV) a financial cooperative that started out serving state and municipal employees exclusively and soon thereafter grew to serve residents in 14 northern and eastern counties. As of 2014, that footprint has grown yet again to include all 17 counties statewide.
“I initially joined the credit union in an accounting and data processing role, and at that time we had about $55 million in assets, roughly 13,000 members, and three branches,” recalls president and CEO Wally Murray. “That included one main branch here in Carson City, one about 325 miles from here in Ely, and a third just down south in Minden.”
By comparison, the organization now has $541 million in assets, more than 48,300 members, and 12 branches, including a mix of freestanding, storefront, in-school, and, most recently, in-store locations.
With 20.4% loan growth and nearly 6% member growth as of 1Q 2015 according to Callahan data, Greater Nevada is an industry success story in nearly all respects. Yet this has far more to do with careful design and strength of spirit than it does with luck.
“The Great Recession basically decimated the community banking industry in our state,” Murray says. And although the downturn also significantly affected the credit union — which ultimately dropped to a 5.54% net worth ratio before eventually recovering to its current 10% — the institution is now positioned as the leading, and in some cases the only, financial institution in many of its markets.
Lessons From The Past
“I became CEO of the credit union in the early part of 2001," Murray says. “One of the first things I did was take a look back to understand what it was that had made us successful for the past 50-plus years."
This corporate soul searching led to the development and documentation of the credit union’s core values for the first time in its history. These values are: Service, Inspiration, Trust, Care, Progress, and People.
“These were things we had made a commitment to already, not necessarily the things we aspired to going forward,” Murray explains. “It was about capturing the ideas that helped make us what we are and the things we never want to walk away from.”
A notable absence in Greater Nevada’s core values is money.
“Money is a tool for us,” Murray says. “We monitor it and it's important, but it's not what we're about. Instead, we’re out to help people have a better tomorrow.”
Since then, whenever important opportunities arise, these six values help tip the scales one way or another.
“When options like subprime lending came along, something that wasn't the right thing for people and didn’t inspire trust, it didn't pass our litmus test,” Murray says.
Not all decisions made during the depths of the recession were as cut and dry, however, and they all came with consequences.
This included the institution not renewing or offering new CDs for a time as well as closing some branches that had alternative service points nearby in order to shrink assets and improve net worth, says Joyce Whitney-Silva, the credit union’s chief financial officer.
But these necessary sacrifices allowed the organization to survive the downturn and start growing again. In fact, its asset base is near pre-recession levels and it has opened three new branches in the past 12 months.
Elko and other mining towns on the east side of the organization’s footprint were largely shielded during the downturn, says Whitney-Silva and their resilience played a big role in challenging the credit union to think more broadly about diversifying its footprint in the post-recession.
But given it’s relative size and prominence compared to neighboring cooperatives, Greater Nevada felt a merger-driven focus might sour potential alliances.
“We've done four mergers in our history, the most recent being three years ago with a tiny credit union in a city where we already had a branch,” Murray says. “But that and every other merger we've done had been brought to us by the regulators. So it's not really a part of our DNA.”
Instead, the credit union pursued a 2014 market expansion that opened access to southern Nevada, a region that includes Las Vegas and approximately 2 million of the state’s roughly 2.8 million people.
Although the market is laden with possibilities, Greater Nevada is moving into it in a conservative, exploratory way. It is relying heavily on its indirect auto dealer relationships, its wholly owned CUSO, Greater Nevada Mortgage, and remote staff to help scout the territory.
“We don't have a traditional vision for Southern Nevada in terms of putting a bunch of branches to attract members because we’ve got a community-oriented model,” Murray says. “I've been in this state for 26 years, and I still don't fully understand the community of Las Vegas. So we want to focus on the niches in that market where we can make a difference.”
One example of a niche opportunity is in recreational vehicle lending, which represents approximately $50 million in the credit union’s current loan portfolio, says Dean Altus, the credit union’s chief operating officer.
“In Northern Nevada, it's fairly seasonable and those loans dry up in the wintertime,” Altus says. “When we started doing them in Southern Nevada, we didn't have that seasonality. We thought it was an anomaly, but it stayed strong throughout the whole year.”
A Legacy Of Care
Although Greater Nevada’s membership is growing stronger every day — both in terms of number of members and in the depth of those relationships — it is still working to achieve its pre-recession membership peak. However, it’s also taking this opportunity to shape that growth in a way that bodes well for its future and matches the needs of its communities.
“For the past few years, we’ve been driving home the message of inclusivity, that this is your credit union, and it’s now open to everyone here in Nevada,” says Kerstin Plemel, Greater Nevada’s vice president of marketing.
In support of that mentality, the credit union offers a $25 member referral payout. It’s not a lot, but it is enough.
“It’s probably not the money that is motivating people but the value they see here,” Plemel says.
In 2014, the credit union also started a new advertising campaign that is primarily focused on the 16-44 age group and emphasizes the role of the credit union during major life events such as graduation, starting a first job, getting married, having children, or buying a house.
“We did some market research which indicated that potential members weren’t as interested in specifics about a checking account or our loan rates,” Plemel says. “They just wanted to know that there was a financial institution they could trust, that was going to take care of them.”
Historically, only approximately 40% of incoming members to the credit union were age 44 and younger. But within six months of launching this new campaign, that demographic grew to more than 60% of new members.
Conversations with the next generation of borrowers are happening on the airwaves, online, and on social channels, but they’re also happening face to face, in branches and community.
Greater Nevada’s TV ads focusing on the nature of change.
“I was at a local establishment a couple months ago, talking to this bartender — a young guy about 30 years old,” Murray says. “And he told me, ‘My wife and I bought a second car. We could've paid cash for it, but I started thinking ahead and knew I needed to start establishing some credit.’”
Unfortunately, the bartender had a few minor medical bills go south and as a result ended up with a 29% loan rate on an eight-year-old car from another organization. So Murray suggested the young man visit the credit union for a better deal and connected him with some of the financial education components the credit union offers through BALANCE Financial Fitness.
This coursework helped the borrower secure a better-than-normal rate, but when Murray saw him again, he didn't want to talk about the loan. He wanted to talk about how Greater Nevada had transformed his entire financial philosophy.
“That's our target member — a younger individual with a family — and he tells me we've changed his life.” Murray says. “We know it takes a while to get folks to trust you once they come in the door. But we're here for the long haul, so we're good with that.”
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