SANTA ROSA, Calif. – Members on hold when they call Redwood Credit Union now hear a message declaring "Thanks a Billion." It's part of a yearlong celebration RCU has launched to mark its entry into the Billionaires Club earlier this year. President/CEO Brett Martinez stresses the milestone "would not have been possible without the participation of our member-owners." He also praises the dedication of the credit union's officials and staff. For Martinez, hitting the billion dollar mark has sweetened his appointment as president/CEO in early March, after serving as interim head for seven months. At the same time, "While the billion dollar asset milestone is significant, it's really important to realize how you got to that billion dollar point. Basically we got to a billion dollars through member participation, support and loyalty over the years. We want to take a moment to thank and acknowledge those members. "From my perspective, the big thing I'm trying to get across to members and staff is to answer the question, `Billion dollars? So what?' The `so what' is the economies of scale we can realize from being a large organization, economies of scale that allow us to deliver more products and services and expand our delivery channels." Martinez's 20-year credit union career seems like a natural choice. His mother, Linda Foy, was CEO of San Bernardino School Employees Federal Credit Union so he grew up hearing dinner-table talk about credit unions. She's now retired. "She was a role model. I picked up from her the values of working hard and, no matter what the decision, always doing the right thing. I kind of have the credit union philosophy running through my blood. I've spent my whole life around credit unions," Martinez observes. He holds a B.S. and M.B.A. from California State University/San Bernardino. He launched his credit union career at Arrowhead Credit Union, where he held a number of positions during his 13 years there, serving as VP/credit administrator when he left. He then joined the California Credit Union League as senior VP/marketing and communication for almost four years. A little more than two years ago he came to RCU as executive vice president/COO. He was named interim CEO when then-CEO William Rayhill retired in August last year. "I love the community in which I work and live," Martinez states. As a native Californian, he appreciates the fact the state's geographic diversity allows him to pursue his passion for a wide range of outdoor activities including water and snow skiing, golf, tennis and boating. When he's out on the boat he's likely to be accompanied by his wife and their two sons, who are 8 and 18. On the job, he describes his management style as surrounding himself with successful people and letting them do their job. "It doesn't matter what I know, or my personal experience. I can't accomplish much of anything. It takes a decided team that knows what they're doing," Martinez says. From the business perspective, the economy in North Bay outside San Francisco is pretty diversified and hummed along while much of the nation struggled. That helped the credit union enjoy strong growth in 2003. Net income reached $13.8 million, up 12% from 2002. Loans expanded $146 million to total $845 million, a 21% increase; assets swelled $90 million to $965 million, a 10% increase; and member savings shot up $76 million to $877 million, a 9% increase. "We're really a leader in the North Bay area. We're pretty aggressive lenders, and currently have a 95% loan-to-share ratio. The lowest it's ever really gotten is around 85%. We also have relatively low to no fees," Martinez says. "Having that model isn't necessarily easy. It means we have to be very efficient. We're a lean organization, and we give back to the members as much as possible." Last year RCU launched online first mortgage and consumer loan applications and approvals. That technology helped cope with the high transaction volumes most lenders were seeing. California in general is famous, or infamous, for expensive housing prices. Martinez notes that "in our geographic area real estate prices are kind of at the top end in the state. It is competitive and we've had some unique products. "In most of our real estate portfolio rates reset in five years or less. So we've been very strong in educating members coming in for 30-year rates and showing them the real benefits of getting lower rates for up to five years. Why pay for a 30-year rate when you don't know what's going to happen in the next five to seven years? I think there's a lot of trust in credit unions in general, and a lot of trust from our members in us." On the negative side, hefty commercial real estate prices and strong demand mean it hasn't been easy to find new branch locations. RCU staff has to spend a lot of time and energy identifying ideal locations. The credit union then has to move quickly when an opportunity does open up. Martinez says if you walked into one of those branches and talked to some members, you'd discover they generally reflect a middle market typical of the overall eight-county area served by RCU, which operates under a community charter. You'd also find some pretty upscale members. RCU is currently examining ways to serve the Hispanic and youth population. Looking ahead, Martinez expects 2004 to be another strong year. In mid-March RCU rolled out business services. Throughout the year the credit union will be adding various components. RCU Services Group, the credit union's CUSO, has introduced insurance products and expects to add an auto-buying service this summer. Challenges? Martinez lists some, pretty much those facing credit unions in general – the rate environment, attacks by bankers, competition in general, and educating consumers about credit unions. "Credit unions are still the best-kept secret out there. Educating our communities about the credit union difference and the benefits of membership is certainly going to be one of our main focuses, and I think it needs to be one of the industry's focuses going forward," he says. -

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