Textbooks guide you through a subject and give you checkups in the form of quizzes along the way to gauge your preparedness. The McGraw-Hill Companies are well known for their textbooks – you've likely used one in school – so it makes sense that the credit union formed to serve McGraw-Hill employees excels at guiding members to success.
Despite a tough economy, McGraw-Hill Federal Credit Union ($256.6M, East Windsor, NJ) grew loans 8.5% year-over-year as of 2Q11. When you look closely, you see the growth was weighed by its small business loan portfolio, so the growth in other areas was even stronger than the overall numbers indicate. McGraw-Hill has a modest small business loan portfolio (by way of a couple of participation loans) that decreased significantly in the first half of 2011, says Joe Conners, EVP and chief financial officer at McGraw-Hill. The other loan types grew enough to compensate for the drop-off.
"We like to think it’s because we’re focusing on our members and their needs," says Conners of the potential growth drivers. Conners says the credit union makes loans to help members save, and that refinancing has been an excellent source of putting money back in members' pockets. In this low interest rate environment, some members can save in excess of $100,000 over the life of a mortgage and auto loan refinanced at McGraw-Hill, Conners says.
Amid all of the loan growth, McGraw-Hill has decreased delinquency, too. Year-over-year, delinquencies dropped 10-basis points drop in excess of 60 days, from .40% to .30%. Loans delinquent for two to six months, loans delinquent for six to 12 months, and total delinquent loans all dropped from 2Q10 levels. Both the strength of McGraw-Hill’s underwriting and the stability of the credit union’s market are significant factors in the credit union’s asset quality, Conners says. Member outreach is critical, too. The staff stays in contact with members before small issues become big ones. For example, the collections department offers help to members who are getting behind on payments, rather than just going in for a money grab.
Moving forward, McGraw-Hill plans to emphasize convenience and service. The credit union partners with California's CO-OP Financial Services to offer members a nationwide network of ATMs and is working to make its online offerings into one-stop shops. "What does convenience mean?" Conners asks rhetorically. The credit union hopes to redefine the term "convenience" with its iPhone app and a service called My Deposit, which allows members to scan their checks and deposit them remotely.
That emphasis on service and convenience has other metrics growing as well. The member base increased 2.6% year-over-year and average share balance rose 5%.
As the credit union moves into the second half of 2011, credit union will underscore its permanent goal: help the member.
“We don’t want our members walking out of here with a product or service unless we’ve developed a mutual understanding,” Conners says. That level of emphasis on mutually beneficial relationships is what motivates the credit union to help members through life’s ups and downs.
Kind of like a textbook helps a student get through calculus.