I headed to south Florida exactly four years ago to take on another problem credit union, Broward Schools Credit Union, in Ft. Lauderdale. Although I'd had experience with two other problem-case credit unions, this time I had quite a few doubts. Even though it had more than 30,000 members and about $140 million in assets, the credit union's capital ratio was barely above five percent. And that was only one of its problems.
The good news is, today Broward Schools is right-side-up again. Our capital ratio has improved to 9 1/2 percent, within reach of our target goal of 10 percent. Our bottom line is strong, running at about 1.5% ROA annually. We've reached an asset size of $162 million.
The bad news is, we are not growing very much. And I want this credit union to do more than just be alive; I want it to thrive.
Throughout my credit union career I've always believed that growth benefits everyone. Growth enables you to increase your capabilities and offerings and the member reaps the reward.
That is the mindset I brought to this credit union. Once we turned things around, performance-wise, we set about to position ourselves for future growth. And we've done all the right things. Here's a brief overview:
We made a complete commitment to technology. We could serve as a textbook model of what technology should be put in place to serve the members and keep staff efficient and informed. We were one of the first credit unions to offer Internet home banking. Our members get totally free on-line bill payment. We send out e-statements. Our website is chock-full of information while remaining easy to navigate. Within the credit union, we have a comprehensive Intranet which gives our staff access to all policies, systems manuals, e-mail, scam alerts, a telephone directory and an internal calendar for payroll posting information and meetings schedule. The Intranet also provides a valuable member service by allowing tellers secure access to our imaging files so they can view member checks, statements, and signature cards with the click of a mouse. And we developed an ''extranet'' for board members that provides them with meeting agendas, financial statements and minutes.
We've paid attention to bricks in addition to clicks. We want to offer convenience in several forms, so we've focused on a branch strategy, too. We're now in five locations in Broward County and in a network of 42 shared branches throughout Florida.
We provide attractive, competitive products and services to our members. As a result, we have a high level of penetration of our membership. For example, out of 33,000 members, 61% have checking accounts. Most managers are happy if half their membership have checking accounts. We've done well with credit cards, too; we have about 10,000 outstanding. And just last year we formed a CUSO so we could offer investment and insurance products.
Our members like us-they really like us. All our surveys show that. And we have some pretty impressive figures for the number of members who view us as their Primary Financial Institution (PFI).
The demographics are in our favor. Although Broward Schools Credit Union is a teacher-based credit union, our state charter allows us to serve students, students' families, and school employees as well. Our charter also allows us to accept retirees who live in Broward County. For those of you who don't know south Florida, Broward County is situated north of Dade County and south of Palm Beach. It's one of the fastest-growing counties in Florida and, as a result, has an exploding school population. In addition, it's an attractive retirement site. So, demographics are in our favor.
And yet, we have not grown. I still believe in my gut that Broward Schools, which is currently a high-performance credit union without growth, can become a growth-oriented credit union. In fact, I believe that Broward Schools can become a billion-plus credit union.
The question is, why haven't we? We've done everything right; we operated on the principle of ''put it in place and they will come.'' Should I just be satisfied that the current members' needs are being met? I pose this as a serious question for all of us, not just my credit union. Is growth necessary? If so, how the heck do we achieve it? We've tried Customer Relationship Management software and other tools, but nothing seems to work. What more can I do?
This is the most important strategic dilemma of our time. We need to wrestle with these questions, because the answers to these questions will determine our future and the course we set to reach our goals. I am just not certain what those answers will be.