Uncontrollable environmental factors such as stiff competition,low loan demand and regulatory changes have posed challenges forCUs looking to grow. But some are managing to do just that. Here'show three credit unions, two in Oklahoma and one in Iowa, achievedgrowth in the midst of a recession.

Halliburton Employees FCU

When Chris Bower came on board at the $100 million Duncan,Okla.-based Halliburton Employees FCU as its new president/CEO atthe end of 2008, he took a careful look at how he could change theCU's operational system to spur growth. He tweaked some loan ratesand tier levels in the CU's lending department, renegotiatedcontracts to save on vendor costs, re-evaluated the efficiency ofhis staffing and rolled out an indirect auto lending program thatallowed the CU to reach beyond its membership.

As a result, assets have grown by approximately 50% in the pastthree years, the CU said. In this past year alone, assets increasedby 20%, from $82.5 million to $100 million, according to the CU'sfinancial performance report. Bower also noted a current return onassets percentage of 1.6% and a 26% total loan increase since2008.

“I looked at everything and decided which areas would be mostbeneficial to implement new strategies,” Bower said.

Marketing also played a key role in the CU's growth. In 2009,the CU set a large marketing budget and leveraged television andradio advertisements to build its brand and spread the message thatit does not limit membership to Halliburton employees. A robustonline banking system and its “$mart Checking” product, a checkingaccount with a 3.55% yield on balances up to $25,000, has helpedthe CU attract new members.

The CU built its indirect auto lending business using the autolending CUSO CUDL's platform. Through its indirect lending, the CUhas stayed true to its philosophy of seeking high-quality creditand actively established relationships with auto dealers, Bowersaid.

Bower said an increase in deposits contributed to the CU's assetgrowth, but a favorable total loan to total share ratio of 72%demonstrates that loan volume helped build assets as well. And witha less economically distressed location and members who work forthe oil and gas services giant, Halliburton Employees FCU has beenlucky.

“We've been blessed geographically,” Bower said. “Oklahomahasn't been hit as hard with layoffs and the economy. Halliburtonhad some layoffs in '08, going into '09, but the company isgrowing.” 

FAA Credit Union

The $502 million FAA Credit Union, Oklahoma City,  justcelebrated its 65th year in business with a majormilestone–reaching $500 million in assets. Since January 2010, thecredit union has grown in three key areas of asset size (19%),direct consumer loans (43%) and membership (5.76%), Vice Presidentof Marketing Alison Wolf said. The CU serves nearly 50,000 membersin eight of Oklahoma's counties.

How did they do it? Wolf said the CU attributes much of itssuccess to quality customer service and strategic marketing. Nearlyhalf of the CU's new members are the result of referrals, shesaid.

“Most of our growth has been organic,” Wolf said. “Our focus hasbeen on improving member service and we have spent a lot of timereassuring our members and helping them through the tough economictimes. Because of that, they continue to be loyal to us and bringus more of their business while also referring their family andfriends to us.”

The CU has turned its marketing efforts inward lately, Wolfsaid. Instead of spending money on branding campaigns, which the CUdid in the past, it focused on recapturing business from itsmembers.

Low auto loan rates offered by competitors and a loss of incomehave challenged the CU in recent years, Wolf said. But according tothe CU's latest financial performance report, from March 2011 toJune 2011, its interest and noninterest income figures have nearlyrestored to their June 2010 levels, from $5 million to $10.2million and from $1.5 million to $3 million, respectively.

“Income is a big issue considering all of the regulatory changesthat continue to impact the bottom line of all credit unions,” shesaid. “Fortunately, our investments and other growth areas havemade up for some of the losses on the income side, and we continueto evaluate ways to make up for this as it's needed.”

As with Halliburton Employees FCU, FAACU's location has worked to its advantage. Since Oklahoma hasnot suffered as much as some other states have, neither have itscredit unions.

“We are fortunate that the real estate and unemployment marketin Oklahoma has not been hit as hard as other parts of the country,so we've been able to make minor changes in our loan policies toreflect these concerns,” Wolf said.

FAA CU President/CEO Steve Rasmussen said the CU's recent growthmeans better service for members. “With growth comes manyadvantages for our members,” he said. “Being larger gives us themeans to offer access with more branches, affordable products andthe latest technology. It's our members who have helped us achievethis milestone and we use this opportunity to serve thembetter.”

Dupaco Community Credit Union

Dupaco Community CU is a two-time recipient of the Lombard,Ill.-based Raddon Financial Group's Crystal Performance Award,which recognizes the top ten credit unions with $500 million ormore in assets for exceptional growth, income, efficiency andmargin management, and the CU's 2010 financials show why.

In 2010, loans grew by 9.45%, deposits by 19.31% and membershipby 7.75%; in December 2010, the CU had an equity to asset ratio of10.17% and a return on assets percentage of 1.10%. According toyear-to-date 2011 numbers, the CU has enjoyed continued success: asof August 31, 2011, loans have grown by 6.87% this year, depositsby 5.33% and membership by 5.32%; its current equity to asset ratiois 11.41% and it has a return on assets percentage of 1.73%.

The president/CEO of the Dubuque, Iowa, credit union, Bob Hoefer, credits the good news to a combination of efforts:watching expenses, focusing on consumer loans, keepingdelinquencies in check, making fee structure adjustments andreaching out to the CU's community.

“With an eye on financial literacy, we emphasized staff trainingamong our nearly 250 employees and stressed the importance oflooking for opportunities to make a positive difference in thelives of our members,” Hoefer said. “We worked hard to maintain ahigh profile within the communities we serve by giving back andproactively providing relevant information and consultativefinancial solutions.” Dupaco Community has assets of $957million.

The biggest challenges facing the CU, Hoefer said, includeoperational challenges created by new regulations, slowing loandemand and increased competition.

“Overall consumer loan demand remained flat, as consumers in ourmarket continue to deleverage,” he said. “Competition was also ahuge factor. All financial institutions in our market are gunningfor loans, and we're all flush with deposits.”

Despite the challenges, Dupaco Community CU reached a number ofmilestones in 2010 aside from earning the Crystal PerformanceAward, including making a core system conversion from HarlandFinancial Solutions' UltraData Enterprise Core to Phoenix EFE Core,opening two new branches and becoming the first credit union inIowa to receive the Iowa Credit Union League Heritage Award foroutstanding leadership.