Maximize The Market

A mid-size credit union uses the cooperative spirit and financial savvy to succeed.


Guthrie Federal Credit Union ($50M, Sayre, PA) isn’t your typical mid-size credit union. The credit union has more than quadrupled its asset base in the past 10 years, and it has done so by thinking big.

When Guthrie’s current CEO, Eric Chase, took the helm in 1993, the Pennsylvania-based credit union was doing fine. The credit union is a multiple common bond credit union with Guthrie Healthcare System serving as its bread and butter. But Chase saw the opportunity for more.

“I’d been looking at it, and I said, ‘Why does a 4,200 person SEG group have only a $9 million credit union?” Chase says. “Something doesn’t add up here.”

Guthrie is located in upstate Pennsylvania, in an area referred to as the “endless mountain region.” There’s a small-town atmosphere in Sayre and Troy, PA, where Guthrie’s second branch is located, and the entire area – which includes the cities of Binghamton, Corning, Elmira, and Ithaca in neighboring New York – represents a tight-knit community.

“I enjoy the relationships here that you can build with people,” says Ken Seaver, Guthrie’s vice president of lending and compliance.

There’s plenty of outdoor activities such as hiking, camping, hunting, and fishing, and the area boasts beautiful parks, mountain scenery, and the Grand Canyon of Pennsylvania. But the area’s rural attractions shouldn’t fool visitors; it also offers its share of culture and entertainment. Corning, is home to the Corning Museum of Glass and the Rockwell Museum of Western Art. Tourists interested in riding a fully functional antique carousel need look no further than Binghamton, which is nicknamed the “Carousel Capital of the World.” And sports fans can take in semi-pro games such as hockey or baseball.


Don’t have a local chapter for your state’s trade association? Grab your area peers and start one.

A survey is a great way to determine if your fees are priced appropriately for your market. If you change fees, be open about it; if your fee structure is better than your local competitions, be open about that as well. Boards in lobbies can be eye-catching and informative.
A combination of online and brick-and-mortar services ensures the credit union has what members of all ages and technical capabilities are 
looking for.

Guthrie Healthcare System, a leader in cardiovascular health and electronic medical records, is one of the area’s top employers. The Marcellus Shale, a natural gas source in the Appalachian Basin, also pulls in a lot of business.

“The economy is pretty strong here,” Seaver says. “We’re fortunate.”

“We’ve had a lot of money coming here,” Chase agrees.

Market & Goals

Generally, the healthcare field offers solid employment and a stable workforce. Guthrie Healthcare System is no different. It employs approximately 4,400 federal credit union staff members and 350 doctors in the area, but Guthrie doesn’t rely on its primary SEG as its sole source of growth. Seven years ago Guthrie merged with a smaller credit union that was affiliated with a hospital in Troy; the move has paid off.


As of June 30, 2010, Guthrie held $44 million in deposits at its two branches. It is in a $350 million market, approximately, meaning Guthrie’s market share reaches nearly 13.1%. Two other financial institutions, First Citizens National Bank ($810M) and Citizens & Northern Bank ($1.3B) hold market shares of 38.2% and 36.7%, respectively.

Teller transactions are growing, but so are automated services. Anticipating a revenue dip resulting from interchange legislation (credit union members had logged more than 1,000 debit transactions as of mid-February), the credit union is making a push for automated services. Approximately 83% of its members use automated services, according to CFO Maria Cicciarelli, which has helped the credit union’s bottom line.


Ten years ago Guthrie’s corporate credit union, Mid-Atlantic, offered an electronic bill pay program that the credit union, which was approximately $12 million in assets at the time, implemented. Likewise, “We knew we needed Internet banking,” Chase says. “So we jumped into Internet banking in 2003.” Now the credit union has its eye on mobile banking, apps, and smartphones. Guthrie doesn’t take on every electronic opportunity, but when it does, it spends the money to do it well.

“It’s going to benefit us if we spend a couple more dollars and do it the right way,” Chase says.

With the right balance of online and on-site services, the credit union hopes to meet the needs of all its members. After all, it realizes a brick-and-mortar presence is a valuable asset in developing member relationships and credit union convenience. According to Raddon Financial Group, people still frequently access their financial institution via a branch lobby or drive-up window. Even people that tend to use electronic channels tend to use many different delivery channels do so and often.

The credit union recently remodeled its main location in Sayre and doubled the size of the branch. But business is booming, and as the credit union has progressed, so has its membership.

“We were hoping this building would satisfy our needs for the next 10 years, but in three years we’ve outgrown it,” Chase says.

Likewise, the credit union sees opportunity in neighboring Troy. It is replacing an old branch with a new location that will offer perks, such as a drive-up ATM and coin counter, as well as the same products and services it offers at its primary location in Sayre.

“We got a lot of market share we can gain over there,” Chase says. “That’s really our big thrust this year is expanding our Troy market.”

Competition & the Cooperative Spirit

Guthrie works closely and shares services with some of the area’s smaller credit unions ranging in asset size from $4-12 million. The credit unions communicate several times a month, and they are in the process of forming a formal organization to talk on a quarterly basis about industry challenges, opportunities, and compliance.

There also are regional banks and larger credit unions in and around Guthrie’s market area. To effectively compete, the credit union consciously prices its products so it is aggressive but not a rate leader.

“We don’t want to be the best game in town, but we want to be close to it,” Cicciarelli says.

Guthrie offers members better pricing on products if they use automated services, which gives them an incentive to use less costly channels.

“If they have automated services, we’ll give them an extra quarter percent,” Cicciarelli says. “That’s a huge benefit to our membership.”

As for fees, Guthrie completed a market survey a year ago that compared the credit union’s charges against what institutions in its market were charging. When it realized some of its fees were significantly lower, it adjusted them to reflect the market. The credit union now posts a higher fee income than its peers, but it is still offering members benefits they won’t find elsewhere.

“We’re not for profit, but we’re not for charity either,” Chase says. “We’ve got to build capital if we’re going to continue to grow.”