At the same time Pawtucket Credit Union has seen membership and assets swell, it has faced the challenge of helping members struggling through a time of high unemployment.
PCU President/CEO Karl Kozak noted unemployment in Rhode Island is currently 11.5%, the fifth highest in the nation, and has been as steep as 13%.
"It's definitely had more of an impact on us than some of the neighboring states," he said. "We've been doing a lot of modifications. We've had a modification program in place for close to two years now. We've helped 150 families and modified more than $20 million in loans, primarily home loans."
Kozak said he thought by now he would have seen a lot more improvement in the economy. But high unemployment and slumping home values continue to be stubborn problems.
"It definitely keeps us tossing and turning at night," he indicated. "Fortunately, we've been able to deal with it and remain profitable. But it's come at a cost. The NCUA assessments on all credit unions are another issue. It's affecting credit union growth for the industry as a whole as well as us. Maybe after next year those assessments will be a lot lower."
When Kozak joined PCU as president/CEO in 1991, the credit union had one office and $120 million in assets compared to 13 branches and $1.2 billion today. He links PCU's growth and profitability to the credit union's employee culture.
"We've grown tremendously in the last 20 years, but we still try to make it a family-operated credit union," he explains. "We offer good employee benefits, but most of all we try to keep a consistent culture.
"When I walk in the door I like to be able to face my employees. It means a lot to me. Last year we came in number three in a [Providence Business Journal] survey of best places to work."
The award was based on employee evaluation of factors such as innovative benefit programs, flexible work arrangements, consistent opportunities for advancement and personal development.
From the members' viewpoint, the PCU culture is reflected in expanded branching into the communities the credit union serves.
"Some of the big banks keep getting bigger and merging," Kozak said. "We've stayed local. We have a small state, so it's easier to have a larger presence."
If growth is to continue, the credit union-like the rest of the industry-realizes it must attract younger members. For example, in 1996 PCU began granting scholarships, recently allocating four-year grants totaling $32,000 to four area high school students.
PCU also hosted a Real World Day which saw more than 400 students apply lessons from a financial literacy program. The program guides students in identifying financial management goals, developing a budget, realizing the costs of using credit, and understanding products such as checking accounts, savings and CDs.
"We do attract young people, but it's a tough group to engage," Kozak acknowledged. "When I say 'young,' I'm talking about people under 20 years old. They get serious when they get ready to buy a car or that kind of thing. We're trying to get the families, the parents, in on this too."
"You do have to have the mechanism. We did some advertising on Facebook, which hasn't produced much. We're looking into mobile banking. We have to be positioned so when they do get serious, we'll be there. It's like Generation X. When we first started trying to attract them, it was similar. Now they're our biggest borrowers."
PCU's growth is also reflected in expanded branching into multiple localities. Kozak believes the credit union has lured a good cross-section of those communities. The credit union is making an effort to reach out to the expanding Hispanic population and position PCU as a friendly place for Hispanics as well as other residents to bank.
"We want to maintain our good citizenship throughout our communities," he indicated. "Opening branches throughout the state is still a strong goal-continuing to grow and be profitable. Still another goal is keeping up with technology. Members from youth to retirees use all forms of technology, but they want branches as well as technology."
With a degree in accounting and some experience in public accounting, Kozak moved into banking in 1980. Five years later he entered the credit union industry, and after six years accepted a job as president/CEO of PCU.
Married with two grown children and a granddaughter, Kozak likes to simply spend time with his family. You might also find him on his boat fishing, or polishing his swing on a golf course.
But driving to the water or the golf course can be frustrating, he added. Although he doesn't have political ambitions, he does have a daydream about one reason for wanting to become president of the U.S.
"One thing that absolutely drives me mad is the nonstop, constant road construction. It seems as though it's been going on for at least the last 10 years. I sometimes say that if I ran for president I'd run on a ticket that we'd take four years off from road construction and give everybody a break," Kozak declared.