How 2 Credit Unions Became Leaders In Member Growth

A big Indiana credit union offers high rates to savers while a small Virginia credit union charges ahead with a community charter.

Evansville Teachers Federal Credit Union($1.2B, Evansville, IN) has more branches than River Trace Federal Credit Union($24.3M, Henrico, VA) has employees 14 versus seven but the two institutions have more in common than a federal charter.

Each has been posting member growth numbers that exceed industry averages, driven in large part by indirect auto lending. But not exclusively. Good deals in checking accounts and good ol’ community outreach also play a part.

According to third quarter performance data from Callahan & Associates, RiverTrace added 1,250 members from 2014 to 2015. Its 90.51% year-over-year jump in membership places the Virginia credit union at the top of the list for credit unions with the highest12-month member growth and no significant mergers.

LEADERS IN 12-MONTH MEMBERSHIP GROWTH For all U.S. credit unions | Data as of 09.30.15 Callahan & Associates |

Rank Credit Union State 12-Month Member Growth Members as of 3Q 2015 Members as of 3Q 2014 Assets
1 RiverTrace VA 90.51% 2,631 1,381 $24,268,451
2 WinSouth AL 82.85% 73,725 40,320 $238,178,849
3 Carpenters MN 79.89% 16,942 9,418 $21,470,898
4 Richmond Fire Dept. VA 69.29% 2,541 1,501 $20,371,944
5 Connexus WI 62.60% 187,243 115,155 $1,136,605,516
6 Trius NE 61.27% 9,455 5,863 $60,808,153
7 IC MA 59.61% 34,817 21,814 $503,295,627
8 Wepawaug-Flagg CT 46.89% 12,384 8,431 $108,251,195
9 U.P. State MI 43.11% 9,259 6,470 $64,282,998
10 Evansville Teachers IN 42.73% 125,335 87,812 $1,157,867,141

* excludes significant mergers
Source: Peer-to-Peer Analytics by Callahan & Associates

Evansville Energy

Evansville Teachers, meanwhile, was No. 10 on that list, and the largest by asset size. It posted 42.73% membership growth in one year, during a 12-month time frame when industry membership expanded 3.7% annually and topped 103 million.

Bill Schirmer, president and CEO at Evansville Teachers for the past four years, says his fast-growing credit union is using strategies he saw work for years at his former employer,Lake Michigan Credit Union ($3.9B, Grand Rapids, MI).

We’re engaging members with much higher rates and currently pay as high as 3.00% on dividends and 2.07% on certificates, Schirmer says. Indirect lending is a big part, but online account opening also is highly effective. Peopleare shocked at how much organic growth we’re seeing.

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He attributes 13% to 14% of his membership growth to new checking accounts. Shares, meanwhile, increased nearly 11% from third quarter 2014 to third quarter 2015 at the Indiana credit union.

Evansville Teachers is also posting strong growth by other measures, including total auto loan growth of 38.97% in the third quarter, compared with 15.29% on average for all credit unions and 17.40% for its billion-dollar peers. But, Schirmer says thecredit union is now nearly loaned out and is going to pare back on indirect lending.

We’re anticipating about 25% member growth now going forward because of that, he says.

Virginia Values

A community charter and community values have helped drive sharp membership growth at RiverTrace, along with a first foray into indirect lending.

There are several reasons why we have seen membership growth, says president and CEO Catherine McDermott. We converted from a single sponsor field of membership to a community-chartered credit union at the end of 2014.That aloneraised our potential for membership to more than 900,000.

Read about member growth and more in Callahan’s coverage of third quarter industry performance.

The suburban Richmond credit unionalso started indirect lending in December 2014, putting $6,734,528 in that activity on the books by the end of the third quarter. That helped drive overall loan growth of 60.03% in the third quarter of 2015 to atotal portfolio of $16.78 million.

We’ve been doing a lot of branding and advertising in the communities that we now serve, McDermott says. We’ve also started doing community events and trade shows where we can get lots of exposure.

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