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PHOENIX – Running a business is nothing new to Arizona FCU President/CEO Ronald Westad. After all, this is the guy who ran a courier service with a friend of his, delivering documents to lawyers, accountants, and title insurance companies while he earned his Bachelor of Business Administration degree in accounting and finance from the University of New Mexico, Albuquerque, But then, unlike Arizona FCU, Westad’s courier company never reached the $1 billion in asset mark. Still, Westad’s courier business gave him the hands-on experience with applying some of the business fundamentals he learned from his college courses. When he graduated, he had his first chance at using these skills in the credit union industry when he went to work at what is now U.S. New Mexico FCU as accounting manager. “It was quickly evident to me credit unions aligned with my personal values and beliefs,” Westad recalls. “It was very easy to do things for the right reasons. “It wasn’t a matter of how much could we make or how much could we charge members. It was a question of how little could we afford to charge and remain safe and sound,” he said. Westad decided he wanted to relocate to Arizona, and in 1988 was hired by Michael Hale, then president/CEO of AFCU, as vice president/controller. At that point the credit union’s assets totaled $50 million. The credit union traces its history back to 1936 when it was chartered as Phoenix City Employees Credit Union. Through the years, a series of mergers and the ability to serve multiple fields of membership boosted assets. By 1996, when Hale moved on to Andrews Federal Credit Union in Suitland, Md., and Westad took over as CEO, the credit union had hit $400 million. In the past seven years, Arizona FCU’s assets have tripled to $1.2 billion. What sets AFCU apart? “Ultimately, every credit union is unique in its own way, whether it’s through the membership or its governance or its staff. I think we are also unique in our own way,” says Westad. “We’ve got a younger membership with a higher demand for credit. That somewhat sets us apart. Despite the relatively blue collar membership, we’ve got a high use of automation,” de says. Certainly the number of new residents pouring into metro Phoenix hasn’t hurt AFCU’s expansion. At the same time, rival financial institutions are also aware of the potential. “There’s been an influx of community banks,” Westad notes. “Their strategy seems to be to come in, develop business, kind of segment their market, then ultimately sell the bank to maximize stockholder returns. “Along with the in-migration to this area and the tremendous growth rate – we’ve been in the top 10 in the nation for as long as I’ve been here – comes a lot of opportunities. While it is competitive, there is arguably market share to be gained, certainly by credit unions, and certainly by Arizona Federal Credit Union.” To keep pace with growth AFCU is expanding its branch network, with four new branches planned in the next two years. The idea is to extend the credit union’s reach into the communities it serves. Technology also plays a role. “We’ve been very successful in balancing our three delivery channels – branches, call center and Internet,” Westad indicates. “From a come in, call in and click in standpoint, we’ve been equally aggressive. Over 52,000 of our members use our Internet access every month. That’s very high penetration, 33% of our membership. We also average more than 70,000 telephone calls a month to our call center. Branches are every bit as important as electronic access and telephone.” Westad says AFCU has focused on providing low-cost access to financial services. That means taking into the field of membership consumers, many young, who really need credit. Yes, that presents higher risk. However, Westad and the board figure risk-based lending makes sense. Higher rates compensate the credit union for the increased hazard. The credit union has worked energetically to attract market share, but on a calculated basis, Westad says. Risk-based lending is an example. The credit union has also applied that aggressive approach to third-party arrangements, working to assure win-win partnership with providers who are willing to meet the needs of AFCU members. “Our board basically adopted in 1996 a core set of visions that included a focus on individual consumers rather than businesses, for example,” Westad says. “It centered on a high level of service. It concentrated on a value proposition that we will make a financial difference in individuals lives,” he says. Westad also believes his involvement with groups such as the Urban League – he’s the immediate past chairman of the Greater Phoenix Urban League.- are important as AFCU reaches out to the underserved. Anyone who is a member of the Urban League can join the credit union. Westad praises the work of the credit union staff in delivering those visions. “The staff is very committed and service-oriented. We have kind of a motto of helping support what you create, and we believe employees play a significant role in our success,” he declares. “They participate in that success through what we call a performance rewards program.” AFCU also shares its achievements with members. There’s a loan interest refund program that rewards members who make their loan payments on time. The refund amounts to a minimum of 1% of the interest paid, and has been more during good years. It’s one way the credit union sets itself apart in the marketplace. The only other area financial institution Westad is aware of with such a program is another credit union, TruWest in Scottsdale. However, Westad isn’t sure the loan interest rebate necessarily boosts member loyalty, and AFCU doesn’t really market it. Off the job, Westad, a father of two children – one three years old and the other 15 months old – enjoys sports, especially basketball. But the demands of his two young children haven’t left a lot of time recently to pursue any hobbies. “We’re about to get one out of diapers, and that’s pretty exciting,” he laughs. He does remain involved in the Phoenix area business and civic community. In addition to his involvement with the Urban League, Westad is also treasurer of a couple other local nonprofit groups, and treasurer of the board of directors of CNBS, Overland Park, Kansas, the broker-dealer and registered investment advisor serving financial institutions. -

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