ALBANY, N.Y. – It seems more credit union CEOs are giving advanced notice of their retirement than ever before. Portland Teachers CU CEO Cliff Dias recently announced he would retire next May and just last week Patrick Calhoun, CEO of the $1.4 billion SEFCU, located in Albany, N.Y., said he will retire at the end of next year. Unlike at PTCU, where the board will conduct a nationwide search, SEFCU already has their new CEO waiting in the wings. SEFCU President Michael Castellana has been named as the new CEO. Castellana and Calhoun both joined SEFCU back in 1988, Calhoun as CEO and Castellana as controller. Calhoun said the board wanted the notice given that he and the board had reached an agreement. "They felt more comfortable disclosing it, rather than relying on condition of privacy," said Calhoun. Castellana was appointed as per the CU's succession plan. He has big shoes to fill. SEFCU has grown rapidly under Calhoun to say the least. During his tenure asset growth averaged 12.5% per year, deposit growth 11%, and loans 10%. Calhoun has also been active in the industry on a number of fronts. He's a founding member of the Filene Research Institute and currently serves on the boards of the New York State CU League and CUNA. Calhoun said he will work hard in the coming year for passage of legislation that will expand the potential of credit unions, such as CURIA. Calhoun, 58, started his credit union career at Atlantic FCU in Dallas back in 1977 as assistant manager. He spent about 10 years there before coming to New York as a consultant with the New York State CU League working with troubled credit unions – one of those was SEFCU. "The previous management had made some poor investment decisions, a series of poor pricing decisions and frankly there was a fairly shallow executive team," said Calhoun. Calhoun helped turn the CU around as interim CEO. Twice he was offered the permanent CEO slot, but turned it down. "I really preferred working as a consultant. It fit my lifestyle more at the time." Eventually he agreed and the rest is history. Calhoun hopes to remain in the industry in some fashion after he resigns next year, but not in a full-time executive role. He believes the industry is struggling with a number of problems, one of which is the motivation for some credit unions to convert to banks. "It's kind of an intersection of greed and ignorance, and members don't know what they're losing," said Calhoun. Calhoun also thinks the industry is being fragmented into large and small CUs. "That endangers our ability to stand together in unity. It's very bad when we sometimes have two or more voices contradicting each other with respect to credit union issues," said Calhoun. He's getting increasingly worried about credit unions not focusing enough on helping people because they are too concerned with the bottomline. In some cases you can do both, he said. SEFCU was one of the first CUs to heavily serve underserved areas. In fact the upstate New York region it serves is almost entirely designated as underserved by the Treasury. "We started with the city of Schenectady, that was our experiment," said Calhoun. He said SEFCU quickly learned that putting branches in these areas helped people and it made business sense. Calhoun said the branches pay for themselves in 24 months and the product mix doesn't have to change much. In his remaining time as CEO, Calhoun also hopes to help reshape the New York CU League. "New York is really looking at the core competencies of the league, and with that a major change in dues and governance as well," he said. He said the league relies too heavily on income from its for-profit operations, such as mortgages. "Relying on the mortgage markets to drive the ability of your functions as a trade association doesn't make sense." Castellana, 42, said he is committed to seeing SEFCU continue to grow, something he thinks is vital in today's marketplace. "I think the credit union industry is in a unique position to either capitalize on the changes that are happening in financial services or be crushed by them," he said. According to Castellana, because financial services are becoming more complex, and credit unions face threats from more sectors, critical mass will be key to surviving. He believes there are many examples of small credit unions meeting member expectations, but where member needs are not being met, mergers can help. "Given the relatively small market share credit unions have compared to all financial services firms, the opportunities are limitless," he said. He reiterated that SEFCU has been very successful in adopting and serving underserved areas. Castellana pointed to the work the CU has done in the low-income neighborhoods of Arbor Hill in Albany and Hamilton Hill in Schenectady. "We have branches in these two neighborhoods that would be considered two of the most difficult neighborhoods in upstate New York. The neighborhoods have embraced us, showing you can have viable cash-based operations and actually bring lifeline services," he said. SEFCU offers pure, no fee checking and does small $500 loans if necessary. Its credit builder services help people with damaged credit repair and build credit. The credit union has a full line of commercial loan and deposit products and is heavily automated. About 50,000 SEFCU members are users of its home banking system. Interestingly, SEFCU has members in every state in the country and in 13 countries. SEFCU originally served state employees in the 10-conty region surrounding Albany, known as the Capital Region. However over the years it did a number of mergers that helped bring it into new areas such as Syracuse and Binghamton, N.Y. It serves 130,000 members. Castellana resides in Albany County with his wife and two children. He is very active in the community, serving on the board of St. Anne Institute, the Albany MBA Advisory Council and the district council of the New York State CU League. For Castellana, the new job takes him full circle. "When I started SEFCU was a small $185 million credit union. It's really grown up. We've had some operating structural problems. Like many other credit unions, we didn't have a well-defined executive structure. I've seen the structure evolve during my tenure and start to take hold." He said he often moved into new areas that didn't have defined management roles. As CEO, now he will be able to help continue to shape that structure. [email protected]