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AMES, Iowa – Kim Sharp’s attitude towards running a credit union is very simple – “If you give people in charge the total power and autonomy to make decisions and share your vision with them, they will live and perform up to your expectations.” That’s the philosophy the 52-year old president of Greater Iowa Credit Union brings to his job at the $152 million CU, and it’s also the way he operates the other lines of businesses he owns such as a construction company, an auto leasing company and a retirement community. A former professor of business, economics and finance at Iowa State University and Brigham Young University (he retired from both positions in May 1999 just before he became the CU’s president), Sharp has led GICU, known until mid-November as ISU Community CU, on an aggressive field-of-membership expansion campaign. But instead of simply gobbling up smaller CUs, Sharp runs the merged CUs as strategic business partners of Greater Iowa CU, and he said this is what has made GICU an attractive merger partner for smaller CUs throughout the state. Sharp admits he wants to be a statewide credit union. “It’s the best way I can protect my market and the services GICU provides. I want to be able to provide super services and attract members without having to offer foolish interest rates,” he said. Sharp adds that GICU currently serves about 25% of Ames’ population. “The only way we’re going to get better and get economy of scale is to expand.” That’s just what GICU has been doing through a series of mergers with credit unions, some of which Sharp said GICU pursued, and some in which GICU was pursued by other CUs. This is a sampling of GICU’s merger activity just in 2002: *In April, it merged with ISEA CU, West Des Moines, $13.6 million. *In mid-September, it merged with Dunham Employees CU, Marshalltown, $930,000; *On Nov. 11, it merged with Iowa National Guard CU, Johnston, $11.3 million; *On Dec. 8, the membership of Armstrong Employees Local 164 CU, Des Moines, $4.3 million, will vote whether to merge with GICU. GICU can also boast of owning 85 ATMs that are placed in many Casey’s and Cissy’s convenience stores in cities throughout the state such as four in Mason City, 10 in Des Moines, and eight in Marshalltown. The credit union is a member of the Shazam selective surcharging ATM network. Sharp treats the smaller CUs that merge with GICU as strategic business units and standalone profit centers so the merged CU has a continued sense of autonomy. He says it’s the same way General Motors operates. “Most of the time when credit unions merge, the continuing credit unions takes all the autonomy away from the merged credit unions. That’s a stupid thing to do. After all the merged credit union knows its market and members. It’s obvious to me that these credit unions have worked hard to survive and want to keep their autonomy,” says Sharp. By running the merged CUs as strategic business units, these CUs have to submit their budgets and marketing plans to GICU detailing what they need for marketing and operations. “They have to be able to stand on their own,” says Sharp. Signage on each the merged CUs reads “Greater Iowa Credit Union, a branch of” and the branch’s name such as Marshalltown. He opines that by running the merged CUs as strategic business units, “it gives them the best of all worlds.” They get to remain autonomous, and GICU provides them money to do things “they’d have to be at least a $20 million credit union to be able to provide.” So far Sharp’s philosophy seems to be working for GICU. In the 16-month period from Dec. 2000 – June 2003, among the seven largest CUs in Iowa in rank order by asset size – John Deere Community CU, Collins Community CU, Dupaco Community CU, University of Iowa Community CU, DuTrac Community CU, Community Choice CU, and GICU – Greater Iowa CU: *ranked first in asset growth – 41.9%; *had the highest loan growth – 26.3%; *had the highest – 1.66% – ROA; *had the highest average net income – 11.3%; *had the highest average capital-to-asset ratio – 15.07%; *had the lowest average delinquent loan-to-total loan ratio – .37%; *had the lowest loan-to-share average % growth – minus 2.10%. GICU’s membership also increased 33.4% during that 16-month period. “Growth in and of itself isn’t a problem, it’s how you manage it,” says Sharp. This year has been one of aggressive expansion for GICU, and Sharp is comfortable with that. But he has different plans for 2003. GICU’s strategy for next year will be “CRP” – “consolidating and refining our partnerships.” Sharp admits that “completing a lot of mergers in one year makes for a lot of change. We want to catch our breadth.” Among GICU’s plans for 2003 are getting its policies and procedures “fine-tuned” and revamping its Web site. But that doesn’t mean Sharp will not remain open to opportunities for further mergers. “As a CEO, it’s your responsibility to have vision and decide where you want the credit union to be three or four years from now,” he says. -

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