United Bay Is Broadening Its Reach By Rebuilding Banking Deserts

When banks reduce their overall branch footprint or even shutter a single location, it can have a big impact on rural communities. In Michigan alone, 321 bank branches closed between June 30, 2020, and June 30, 2022, according to FDIC data. Beyond closing branches, nine financial institutions left the state altogether during that same period.

For some cooperatives, serving newly created banking deserts is an opportunity to live their mission while charting a new path to sustainable growth. That was the case when Diane Abbonizio, CEO, and Doug Kelley, CFO of United Bay Community Credit Union ($279.0M, Bay City, MI) learned about the vacancy Huntington Bank had left in Coleman, MI.

“It was causing hardship in the community,” Kelley says. “Small business owners would have to close down and drive 30 minutes to access the closest financial institution.”

Abbonizio learned of the need from a village president in one of the neighboring communities where United Bay had been considering opening a branch in 2020. Although that location wasn’t a fit, those conversations opened the door to serving Coleman and growing the credit union’s small business accounts.

During the past year, United Bay has opened more than 50 business accounts and continues to build new relationships each day. Although the credit union provides financial convenience, its impact has been much greater.

“Ownership in the credit union is giving people pride back in their town,” Kelley says.

Building Trust When New To The Neighborhood

In March 2022, CEO Abbonizio announced the credit union’s move into Coleman at a local hair salon. A large contingent of members from the Coleman Business Alliance was present, which helped foster excitement and build trust from day one.

“The ink was still wet on the purchase agreement,” Abbonizio says.

Next, the cooperative began to build its staff. It found a branch manager who had grown up in Coleman and wanted to return home. She’s since been busy building relationships.

“Everyone working in Coleman is from there,” Abbonizio says. “We strive to have that hometown feel.”

In that spirit, United Bay began volunteering in the community and attending local celebrations even before its new branch opened in October 2022. The team partnered with veterans’ organizations, donated funds to the area’s park, and participated in Coleman’s Christmas parade.

Thanks to grant funding and its local connections, the credit union is now in the process of replacing the scoreboards for the community’s high school. Abbonizio recognizes the credit union can’t do everything, but its mere presence holds a lot of power. After the credit union opened, someone bought a facility and turned it into a combined grocery and hardware store.

“We’re creating energy and excitement here,” she says.

For some members, the memories of bank mergers and branch closures are still fresh. It will take time to rebuild their trust.

“We’ve had people wait six months and then come in and say ‘OK, now I can open an account,” Kelley says. “Longevity is important, and we had to show them we are committed to being here.”

A Broader Growth Strategy

United Bay’s move into Coleman is part of the cooperative’s broader strategy to connect Bay City and the Kalamazoo/Portage area of Michigan. After a 2012 merger, the credit union struggled with an “us versus them” mentality while serving two separate markets. When Abbonizio joined as CEO, she prioritized applying for a full state field of membership. Now, she’s looking to broaden its “handprint” across Michigan.

That means a lot of work in small and rural communities to find areas that aren’t overbanked.

“We want to find areas that need us,” Abbonizio says. “That includes financial services, but also employment and support for the community.”

To find communities that are the right fit, United Bay typically spends a year or more researching the area to understand the business community and assess properties. Factors like a location’s proximity to downtown and drive-thru access are important.

Once the credit union selects a community, finds a branch location, and completes the building purchase, it can take another year to complete the renovations required to brand the branch as United Bay before the grand opening. In Coleman, the credit union pushed hard to complete renovations in seven months so it could open the branch during the local high school’s homecoming week.

“There’s a big parade that week, and it gave us the opportunity to make a big impression as we opened,” Abbonizio says.

The credit union’s renovations in Coleman included turning an old vault into a community room and working with the local historical society to incorporate artwork in the building. The old vault door is now a magnetic board on which people can post business cards and flyers about local events, making the credit union even more of a community hub.

Managing Risk And Other Lessons

Before opening the Coleman branch, United Bay relied on word-of-mouth and face-to-face relationship building.

“We spent time in Coleman talking to businesses and letting them know we needed their support to be successful,” Kelley says.

Although smaller communities might not have the same growth potential as larger ones, United Bay is finding loyalty and commitment can make up the difference and even broaden a branch’s potential service radius.

“Michigan is a collection of small communities,” Abbonizio says. “People in Coleman are telling their friends 30 miles away about us, and we’re now having conversations with the surrounding farming communities about what they need.”

Abbonizio recommends all credit unions, but particularly smaller shops looking to expand, start by creating a statement of purpose and sticking to it.

“There are more than 100 vacant financial institutions in the state right now that have been closed due to M&A and population declines,” the CEO says. “But they are not all the right ones for your credit union. Leaders and boards need to figure out their niche and feel comfortable with what they are doing before they commit to serving a community. Success isn’t about getting bigger — it’s about being there long term.”

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