Community First Credit Union ($1.4B, Appleton, WI) is in an enviable position. It is growing loans faster than it is growing shares. At mid-year 2010, the credit union’s 12-month share growth topped 9%, while its total loan growth reached nearly 16%.
“Over the course of the past few years, loan growth has been tough,” says Catherine Tierney, president and chief executive officer of Community First. “We’ve got 88,000-plus members. Maybe close to 50% borrow with us.”
“We know there’s a lot of existing members who have loans other places,” Tierney continues. “The best way for us to grow loans right now is to steal them from other financial institutions.”
Community First has spent the past 18 to 24 months recapturing lost opportunities. It sponsors thematic “loan steal promotions” to incentivize employees and make sales fun. During a loan steal promotion, every time a staff member talks with a member – no matter the cause of the initial interaction – they attempt to discover if, and where, the member has loans and why they don’t have their loans with Community First. Instead of approaching the loan steal as a sales pitch, employees look at how the credit union can save the member money and make their life easier.
“We can combine, we can consolidate, we can stretch out a payment, we can do all kinds of things,” Tierney
says. “The concerning thing for me as a CEO is, why doesn’t every member come here first?”
The loan steal initiative has had a major affect on the credit union’s lending portfolio. The credit union is posting growth in credit cards (21%), used auto (8%), first mortgage (29%), and business lending (30%).
Of course, loan steals are not just about getting a loan; it’s about getting good loans. Community First’s delinquency rate is down 2 basis points from one year ago to 69 basis points. Its regional peer group (credit unions in Wisconsin, Minnesota, and Michigan with $750M-$3B in assets) has a delinquency rate of 1.71%.
And what about those members who don’t have loans elsewhere? Community First offers a rebate of up to $500 to entice them to take out a loan directly with Community First. The credit union sends a physical check – signed by Tierney’s own hand – to the member. This is just one way Community First recognizes the importance of developing a complete financial relationship with every member.
“Once we have a member involved in loans and checking and savings and money markets and CDs,” says Connie Lendved, a receptionist at the credit union’s Nicolet Branch, ”they’re going to be here for life.”