When CEO Ron Kase joined Landmark Credit Union 39 years ago, he expected it to grow, but he likely would not have wagered it would reach $2.2 billion by the time he retires in January.
“I do know we expected to provide service to our members in a way that would continue to expand and grow the credit union,” he recalled.
As far as Kase is concerned, an organization to some degree has to grow to cope with inflation ratcheting up everything from the cost of paper to heating and air conditioning.
“However,” he continued, “depending on how you define small credit unions, there are small credit unions that are largely done by volunteers where the select employee group is still picking up some portion or all of the daily expenses such as rent and electricity. So some small credit unions may continue to thrive without growing their organization. To the extent a small credit union serves a niche, and provides a service their members can’t get elsewhere, I think they can still be successful.”
If you hopped in a time machine and went back to August 1973 when Kase arrived, you would have found a one-sponsor credit union, Rex 2 Credit Union, serving Rexnord Corp. Punch some more buttons in your time machine to arrive in 1985, when the credit union became Landmark Credit Union open to people working or living in the greater Milwaukee area.
The greatest challenge in reaching $2.2 billion?
“There have been a lot of challenges,” Kase responded. “The biggest has always been the challenges provided by the political and economic system. From 1979 through 1982, political and economic events dictated interest rates should be extremely high, and we had to fight our way through that scenario. Today, political and economic events dictate interest rates should be extremely low and we have to fight our way through that scenario.”
“We’ve had all kinds of ups and downs in between. We need to make sure we have people on board who can handle not only today’s business but can grow into the positions and jobs in the credit union as they evolve, people who are smart enough to grow with the company. They also have to realize that what has gotten us to this level of success is sticking to our knitting, which means treating members fairly and looking out for their economic well-being.”
After all, Kase figures, nobody can predict the future with absolute precision, but “you’re paid to look ahead.” For example, when Landmark correctly expected a housing market crash, the credit union sold most of its mortgage portfolio to Freddie Mac and Fannie Mae. Similarly, although the credit union had a robust business lending operation, management decided condominium and retail development was overheated so Landmark shied away.
Landmark has also introduced programs tailored to shifting economic patterns, for example efforts to help people struggling with subprime mortgages.
“Early on, we provided something that at the time was not available through agencies such as Fannie Mae and Freddie Mac,” Kase explained. “That was called a ‘Helper’ program, and it was only partially successful. We did enable some members to stay out of foreclosure. That has been taken over by programs the two agencies came out with to allow refinancing at lower rates even though borrowers may not have equity in their homes.”
In the early 1990s, Landmark rolled out a first-time homebuyer’s program. The idea was to assist what Kase describes as good people who needed assistance getting into a home. The credit union waived some closing costs for buyers who had not owned their own home in the past three years. The program was very successful, Kase said.
Kase described what he considers the three legs of Landmark’s progress–a roster of 250 SEGs, a mortgage program that has reached $1.3 billion and indirect lending that has ranked Landmark the top auto lender in southeast Wisconsin.
The numbers have also been boosted by the fact that during the past three years Landmark has completed mergers with 10 credit unions and recently applied with federal and state regulators to buy Hartford Savings Bank, a mutual savings bank.
“That’s making its way through the regulatory channels,” Kase said. “We hope the merger will take place at the end of this year. In most of the mergers people have known us for many, many years, they know how we do business and treat employees and know we are going to provide excellent service to their members. Hartford was no different. I’ve known the two principals there for an extended period of time.”
“Like most of the regional banks Hartford was affected by the economic climate of the past five or six years. They came to the conclusion that at their size, about $190 million, they probably would not be successful over the long term. They knew we would take care of their customers and their employees.”
Looking back over almost four decades at Landmark, Kase said he’s probably proudest of the fact the credit union has been able to provide many family supporting jobs, with the number of those positions growing as the credit union has grown. He’s also pleased Landmark has been able to help many people get started financially and overcome temporary economic troubles.
Kase became involved in financial affairs after serving in the Army at Fort Ord and discovered he liked that aspect of the business world and the people-focused aspect of credit unions.
He makes the best of his 30-minute commute to work by using the inbound trip to wrap his mind around the day’s schedule. Heading home in the evening he loosens his tie and switches his thoughts to domestic affairs.
As he anticipates retirement, he looks forward to spending time with his two children, who each have a boy and girl likely to keep a grandfather busy. Kase makes the best of Wisconsin winters as a curling enthusiast, and in summer he’s likely to head for a golf course. He is also a licensed pilot who enjoys flying small airplanes.
About Landmark Credit Union
Assets: $2.2 billion
Primary sponsor: Community Charter
Capital-to-asset ratio: 7.82%
Loan portfolio: $1.7 billion
About Ron Kase
Two grown children
CEO since 1973