About five years ago, Fort Knox Federal Credit Union moved about$180 million into investments paying just over 5%, and locked thatmoney in for five years.

It was a dramatic shift. The previous investments had beenpaying more, so at the time it might not have seemed a sensiblemove. Looking back, it could well be described as the right move atthe right time, helping shelter the credit union from what is nowcalled the Great Recession.

It’s all part of what Fort Knox FCU President/CEO William Risseldescribes as doing things “the old-fashioned way. We go out andearn it.” At a time when margins have been sliced, the credit unionhas earned a strong return on assets.

“First off, we in Kentucky have not been as dramaticallyaffected [by the struggling economy] as some other areas. We dohave over 9% unemployment, but we don’t go through the same boomsduring good times, and we don’t go through the busts as much duringbad times.”

“We work very hard at keeping our operating expenses down, sowhen you combine the asset-liability management piece of it withcontrolling operating expenses we’re able to pay our members marketrates or above market rates, charge them below market rates andstill make a really good ROA.”

At the same time, Fort Knox FCU is constantly looking for new markets and movedinto commercial lending to help balance too much liquidity, asituation familiar to many credit unions. Four or five years ago itbegan offering commercial loans and expanded that activity a coupleyears ago.

Rissel sees it as an area where the credit union can helpexisting members who own businesses and also offer businessproducts to people who have business accounts with community banks.It’s an opportunity to write more loans, he said, and he likes thefact the loans come in larger amounts and generally reset everythree to five years. That will let Fort Knox FCU ride interestrates up.

It’s the opposite of what the credit union did when interestrates were high and the credit union expected them to drop. On theliability side, Fort Knox FCU is locking in member deposits, usingrates as an incentive, for longer periods of time. That’sespecially true of CDs.

“As rates go up, our cost of funds will rise slower than ouryield on assets,” Rissel projected.

Since Rissel became CEO in 1991 the credit union has grown from$125 million in assets to more than $1 billion and from fourbranches to 14. NAFCU has named Fort Knox FCU credit union of theyear, and it has twice been selected best credit union serving theU.S. Army.

Challenges? Of course. High on the list, Rissel said, is how tocontinue to innovate and keep a strategic advantage. Another issueis deciding what the credit union should do and shouldn’t do whenexamining what seem like millions of opportunities.

“Given limited resources, we know we can only do some of thosethings,” he noted. “One of the challenges is ferreting out what arethe best opportunities and not spending resources on things that inthe long run would not be the most productive for us.”

The credit union hasn’t shied away from modern technology, andit has earned recognition for being the most popular credit unionon Facebook.

“The marketing department did several campaigns aboutunderstanding the value of social media,” Rissel said. “Like a lotof things in marketing, you ask if there is a payback. We did somepromotions on Facebook before some of the rules changed, and wewere able to get a lot of member activity.”

“The promotions were not designed to be turned into financiallyprofitable transactions. They were more aimed at embedding thecredit union and its philosophy.”

As credit unions become larger, Rissel suggested, they may startlooking more like banks. But one example of the credit unionmovement at work occurred in 1995 following the bombing of theAlfred P. Murrah Federal Building in Oklahoma City.

Federal Employees Credit Union–now Allegiance Credit Union–waslocated in one of the most devastated parts of the building. FortKnox FCU sent 16 employees at its own expense to work in thatcredit union for six weeks.

Perhaps part of the determination Rissel exhibits reflects thefact he is part Seminole, a tribe that has never surrendered. Evenso, as a University of Florida graduate, he roots for the Gatorseven when they’re playing the archrival Seminoles from FloridaState.

He graduated during the Vietnam era and had enrolled in ROTC, sohe fully expected to be sent to Vietnam. Instead, he found himselfassigned to NATO in eastern Turkey.

When he re-entered civilian life he found a job in retail creditwith the W.T. Grant chain. He earned an MBA with honors fromUniversity of North Florida. He also graduated with honors from theAmerican Bankers Association’s Stonier Graduate School of Bankingat the University of Delaware, the first credit union executiveadmitted to that program.

Both Rissel and his wife love sailing, and recently chartered a40-foot sailboat in the British Virgin Island. He also works onstained glass.

If you were to visit FKFCU five or ten years from now, youprobably wouldn’t find Rissel there. He’s nearing retirement. Buthe hopes some things will remain in place.

“I would hope the things that wouldn’t change would be the basicfundamentals that have made us strong,” he said. “Those things areunderstanding that overseeing operating expenses is one of the mostimportant things you do, and being willing to make hard choices tokeep those under control.”

“The second thing I would hope is we’re competitive in ourproducts and still finding new ways to serve members and balanceour members’ interests with the credit union’s interests.” 

About Fort Knox FCU

Assets: $1.01 billion

Members: 80,097

Primary sponsor and SEGs: Civilian and military serving at FortKnox and people who live or work in central Kentucky. 400 SEGs.

Branches: 14

Capital-to-asset ratio: 13.03%

Loan portfolio: $609 million

Employees : 218

About William Rissel

Married, two children.

Graduate of University of Florida and University of NorthFlorida.

CEO since 1991.