In Texas, it's no secret that going big is the likely way to goin the Lone Star state.

It's here that one is more apt to find a cooperative such as the$6.7 billion Security Service Federal Credit Union that has a loanportfolio equal to the size of its assets – $6 billion.

The San Antonio-based financial institution recently celebratedthat billion-dollar lending milestone with indirect auto loans being the clearleader making up 76% of the credit union's loan portfolio, saidJohn Worthington, senior vice president for Security Service. Thesplit between new and used vehicle loans is close at 55% and 45%,respectively.

“We were in the indirect business when credit unions wereaccused of being Communists for doing so,” Worthington joked.“Attitudes have changes. We have a business model that has workedsuccessfully.”

Indeed, Security Service is the top ranked credit union indirect lenderin the country, according to Callahan and Associates Inc. Thecredit union is also ranked first in auto lending among allfinancial institutions in the San Antonio area and in the entirestate of Colorado, where Security Service has a growingpresence.

“Because of our unique home equity laws in Texas, our creditunions tend to focus heavily on automobile lending, and SecurityService has done a phenomenal job with indirect auto lending,” saidDick Ensweiler, president/CEO of the Texas Credit Union League.“Having reached the $6 billion mark, it's pretty clear that theyhave a system in place that works well for them.”

Worthington said much of Security Service's lending successcomes down to a mix of practices that have consistently stood thetest of time: conservative underwriting practices, an experiencedteam of professionals and a very strong corporate culture made upof employees who value their employer and the members.

Established in 1956 in San Antonio at Kelly Air Force Base witheight members and $25 in deposits, Security Service has grown intothe largest credit union in San Antonio and Texas and the eighthlargest in the United States. It has 37 branches in Texas, 19 inColorado, and 14 in Utah.

Security Service said it reached its first million dollars inloans in 1966. Over the years, the credit union has steadilyincreased its asset size and expanded its operations, includingacquiring or merging with 21 credit unions in Texas, Colorado, andUtah and consolidating them into the enterprise.

In the indirect lending space, the relationships that SecurityService has built with dealerships have helped to grow the autolending business, Worthington said.

“When things went bad and captives went out of business andothers pulled back, we were there,” he recalled. “When you maintainconsistency, dealers know you can count on them.”

When the country spiraled into a financial downturn startingaround 2007 and into 2008, Security Service vetoed its recoveryauto function, Worthington said. Instead of going after members whowere not able to make their loan payments, the credit union offeredseveral ways to help out including modification plans.

“These are loyal members who have been good to the creditunion,” Worthington said. “We took the approach that they're goodpeople out there that have had bad things happen to them. Ourattitude was we need to contact those members who are havingproblems or are delinquent and then work with them to maintaintheir car or house.”

Those efforts appeared to have paid off. As of June 30, SecurityService's loan delinquency rate was 0.78% and chargeoffs were0.56%, according to Worthington.

With its vast open spaces, Texas is known for its commerciallending opportunities. It was here that the $1.4 billion Texans Credit Union built a commercial real estate empiresecuring deals worth millions both in and outside the state. It wasalso here that the cooperative succumbed to the weight of loanlosses and fell into conservatorship in April 2011. The NCUAreported in May that Texans is on the road to recovery and turned aprofit for the first time since 2007 after refocusing on consumerloans and shutting down unprofitable branches.

Ensweiler said credit unions throughout Texas weathered wellduring the economic recession, and stand poised to meet thefinancial services of their members and community.

Security Service, Texans' neighbor nearly 300 miles away, isgrowing its nearly six-year old commercial lending programmethodically even though business accounts have been offered forquite some time, Worthington said. Currently, real estate andbusiness loans make up only 9% of the credit union's portfolio with$140 million in loans. Security Service is also a SBA Preferred Lender, which means itcan process and approve loans faster than the agency's traditionallenders. 

Worthington said an experienced lending team has made thedifference.

“It's apples and oranges with commercial and consumer lending,”Worthington said. “That's something some folks don't understand.Those that ran into problems may have overshot theirheadlights.”

Of those credit unions Security Service acquired and merged withover the years, some brought with them commercial lending problems,Worthington said. Again, the lending team had the expertise inplace to mitigate those situations, he pointed out.

Security Service has an in-house lending group and also workswith brokers, Worthington said. That combination has helped tosecure deals such as a recent member-owned hotel in El Paso, Texas,which is thriving, he added.  Even though there's a hugedemand for new facilities in certain areas, the credit union willstick with its conservative commercial lending model. Members muststill bring smart financials and solid business plans to the table,Worthington emphasized.

While refinancing numbers are up, overall, residential mortgageactivity is still building, Worthington said. The credit union istesting out new systems and program to make the application andfunding process easier.

In reaching the $6 billion in loans milestone, Security Servicetouts a recent marketing campaign that helped reinforce the creditunion's reputation in its markets. Another area that getsoverlooked is having a very competent workforce.

“They're the people that make things happen. The folks at theinsurance centers and various points of contact – they do aterrific job,” Worthington said. “If you give them the tools to getthe job done, they will be happier and more engaged.”

Security Service President/CEO David Reynolds and Jim Laffoon,executive vice president and chief operating officer, meetquarterly with the departments in Texas, Colorado and Utah to getfeedback on how to do things better. 

“There are a lot of moving parts to help make thingssuccessful,” Worthington said.