BEAVERTON, Ore. – Members of the Billionaires Club may be tempted to feel like a college football team positioned for a BCS bowl game. But Tom Sargent, president/CEO of First Tech Credit Union, cautions against becoming complacent and believing your own press clippings. He offers that warning even though while it took FTCU 50 years to reach the $1 billion mark, projections show the credit union hitting $2 billion in three years. There's really no secret to FTCU's success, Sargent says. "I wish there were some formula so we could sell it," he quips. "We have an excellent, experienced board and management team working together for a goal that's familiar to all credit unions – trying to deliver a high level of service to members. "Probably our key is the demographics. Our membership in general is very young. The average age is 34. One of the first successful home banking products in the country was developed here, back in 1990. I remember the television stations coming out and people asking, `Do you really think anyone will ever use their computer for banking?' "One of the things we understood with young members is they like convenience. They are very transaction-oriented. A 20 or 30 year old member doesn't think in terms of a time certificate." Sargent notes he no longer fits into that demographic. Instead of personally identifying product needs, he talks to his daughters. They're 24 and 26 years old and he figures they have a lot better feel for what the average member demands today. The credit union's board itself is also young, certainly in the credit union world. In fact, FTCU members have elected a director as young as 23. Most are probably in their late 40s or early 50s. "They're very sensitive to trying to recruit board members who represent the membership. Quite often that means younger than normal," Sargent says. It seems likely Sargent has no problem with young people making their mark. In fact, although he's only 53, he's been in financial services for 36 years. His career started when he was 17 years old and was selected for a scholarship by U.S. Bank. He alternated attending University of Oregon for 12 months and working at the bank for 12 months. He recalls it as a wonderful experience. By the time he was 24 he was a branch manager. St. Helens Community Credit Union, just getting into share drafts, was a good customer. One morning the credit union manager asked if he would be interested in joining the staff. At first Sargent declined the offer. But that afternoon, after thinking it over and asking himself if he wanted to continue what he was doing for the next 40 years, he decided to make the change. After serving as branch manager and working in marketing, he moved on to become president of Pacific Northwest Credit Union, followed by Clark County Credit Union. Then in 1985 Sargent was named CEO/president of TFCU. "This was a good fit from the day I walked in," he declares. "It has always felt right. I'm fortunate some of my very good friends are people I get to work with every day." Within the past year FTCU has merged with two credit unions, State Employees Credit Union and Oregon Metro. But the approach has taken the form of a franchise or sub-branding relationship. Both brands are retained in their markets. State Employees Credit Union is known as State Employees Credit Union – A Branch of First Tech. Similarly, Oregon Metro is identified as Oregon Metro – A Branch of First Tech. "What we recognized a number of years ago when we opened in Seattle was although we had very good recognition in the Portland market, especially on one side of Portland in the high-tech community, when we moved into a new market our brand recognition was non-existent," Sargent explains. "The cycle to bring in new members was much longer. But if we can partner with a credit union and retain their brand as a franchise while they have some autonomy as a business unit within our network, it's going to fit better for their existing members." Both SECU and OM are now represented on the FTCU board. The CEOs of SECU and OM are each responsible for their franchise. They know their markets and where to site branches. At the same time they benefit from FTCU's back office strengths. On one hand, having a base of high-tech employees helped boost FTCU, especially during the 1990s when high-tech companies boomed and young people parleyed stock options into considerable wealth. But now Oregon and Washington, the two states FTCU draws on for membership, have been clobbered with the nation's highest unemployment rates the past two years. High-tech companies have not only pulled down the Help Wanted signs, they've actually laid off people and in some cases disappeared. "Our members have gone through a lot of stress," Sargent notes. "We've tried to help them. We have budget counselors on site who advise more than 100 people a month. They also conduct seminars almost every night. "We've tried to build what we call an advocacy model. Cross-selling and selling products isn't really what employees like to do and what employees like to have done to them. We want employees to be advocates for the member. "When they're talking to a member they're comfortable suggesting a product that might be better than what the member has now. If our product is not better, tell the member that also. We want to be impartial. We have 120,000 members and there are probably 120,000 different family issues, work schedules and so on. You can't use a cookie cutter approach." Even with an in-depth understanding of members, there are surprises. For example, when home banking was introduced, the role of branches was expected to fade as members stayed home and clicked computer keys. Yes, the credit union boasts the world's high percentage of online banking use. But along with that has come transaction inflation. Instead of writing 10 checks a month and coming into the lobby perhaps once or twice a month to cash a paycheck, now a member typically has 25 to 30 contacts with FTCU each month. So even though each transaction is cheaper, the cost per member hasn't dropped. But hasn't technology at least siphoned some potential activity away from the branches? "We don't know," Sargent replies. "What we've tried to do is make the new tools very accessible and user-friendly. There are two ways to change people's behavior. You can penalize them or you can provide incentives. We believe very firmly we should emphasize incentives to use the tools that are best for the member and the credit union by making those tools easy, problem-free and reliable." Although FTCU has joined the Billionaires Club, Sargent believes all successful credit unions share something. "Anybody who has been successful, whether they're a $5 billion or a $5 million credit union, has a lot of the same principles. You understand your members and you ask what's best for them," he says. "One time when my daughters were little, one of them asked me, `Daddy, I know you're in banking, but what do you?' I had to think about that. `Well, honey, all we do is buy and sell money.' We have a group of members that want to sell us some money at an agreed-to price and others who want to buy money. Everything else is about how do we do that. "You always wish you were smarter or whatever. I know there are people who are smarter and understand things better than I do. I'm afraid of that. But the result is you challenge yourself every day and get better every day," says Sargent. [email protected]