Rockland FCU Climbs From Conservatorship to Billionaire's Club
When Thomas White moved into the CEO's office at Rockland Federal Credit Union in 1994, some people might have questioned his decision to take on the job.
The credit union was in conservatorship, battered by delinquencies, sagging capital and what NCUA evidently saw as weak leadership. White had developed a reputation for saving troubled credit unions, so he was brought in to take charge and restore the credit union to health.
At the low point, RFCU's assets had shrunk to $189 million. By early 2004 the count was up to $610 million. Today, the credit union is a member of the billionaire's club, with $1.45 billion.
What's more, the credit union has been dealing quite well with the recession-or at least better than financial institutions in many other areas.
"Generally, what I'm seeing here is better than in some states," White indicated. "We've been more typical of the mid-Eastern region. New York, Boston, Connecticut have held up pretty well compared to states like Florida and Arizona. We are seeing job loss and salary cuts. Two areas where we have been impacted have been delinquency on real estate loans and members struggling with their credit cards."
"Valuations had held up okay. We do have some valuation issues with real estate but not nearly the issues experienced in other regions. We haven't had a surge of foreclosures so far. In this environment, we've had a lot more modifications-reducing rates, changing terms, trying to work with the members to keep them in their homes-rather than trying to liquidate the asset, which is the worst way to recover your loan balance."
As far as White is concerned, the member is always right. The membership includes many self-employed blue-collar workers, often carpenters or other construction workers.
"They're probably having a more difficult time than most people. There's just no work out there for them. A lot of them live day to day. It's a challenge to recognize that and work with them through these current times," White said.
"We try to build our products around it. We recognize we have many self-employed and create, for example, checking accounts that take that into consideration. Many of them may not have ACH, for instance."
So with member service in mind, RFCU recently redesigned its website.
"We had the same one for a while and it seemed to be getting a little bit stale, and it wasn't as member-friendly as we wanted it to be," White explained. "We hired a third party to redesign it, refresh it and make it easier for members to move around on. Members do find it simple to navigate, and they like the colors."
The commitment to service also means being there when members want you, including three branches that are open Sunday. Two of those branches are in supermarkets, and the third is in a Walmart.
The first of the supermarket branches opened in 1997. It is in Weymouth, next to a hospital that was a RFCU SEG. White called the response "tremendous," noting the branch handles 25,000 to 27,000 transactions a month.
"In fact, all three of them generate deposits that make them self-supporting," White said. The branches not only attract existing members, but also people from the immediate neighborhood who frequently shop the store, spot the branch and realize how convenient it would be to have an account there.
RFCU offers indirect lending, booking some $220 million in auto loans in 2010. The credit union saw problems back in 2006 and 2007 in auto delinquencies and tightened underwriting standards. Delinquencies are now lower than they have been in two or three years.
The business loan portfolio totals about $50 million. Most business loans are secured by real estate, and only one or two have posed problems. The credit union is conservative and only issues about $4 million to $5 million a year in business loans.
Actually, White said, the credit union has been through economic cycles before. The big challenge today is steering through regulatory and legislative issues such as interchange income, corporate assessments and cautious examiners.
Also on the list of challenges is the fact that RFCU is going through a core conversion after being on the same system since 1987. On the positive side, the change is expected to bring some additional efficiencies and new opportunities to serve members better. The loan origination system, which drives the all-important auto lending business, is being upgraded at the same time.
"We see some improvement in credit, and I see that as stabilizing," White said. "Our earnings projections for 2011 continue to be similar to 2010."
After graduating from Boston College with a major in accounting, White worked for KPMG for more than seven years, then for a bank before being recruited by Progressive Consumers Federal Credit Union in Malden, Mass.
Six months later they were in conservatorship. White worked with regulators to help merge the credit union. After the merger, the opportunity to join RFCU came along. Some members of his team from Progressive came to RFCU with him.
White believes his management style has changed.
"When I first came here, I was a lot more focused on controlling and managing the process myself," he said. "Over time, I've found I try to delegate as much as possible and empower people to make decisions on the spot. I'd rather have them make the decision, even if it's the wrong one. The sooner we make the decision the better off we are."
"I have a very good team. They've been with me a long time, so I have a lot of confidence in their good judgment. The same with the board. We've had the same board since we came out of conservatorship."
Married with two children-one out of college and another still in college-White likes to play golf in the summer. He also goes to the gym to work out and does a lot of reading.
"I tend to be out in the community. The members sometimes call me directly. It upsets me when they have to call me a second time because our people have fallen down. It's not often, but it gets me when service to a member has been less than I would like it to be. I feel as though I've failed," he said.