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SCOTTSDALE, Ariz. – Executives from two California credit unions shared their experiences as new entrants into the business lending arena with both sharing many commonalities as well as differences. The $737 million Altura Credit Union, which recently became an SBA-approved lender, started its program a few years ago, did $9 million in business loans and had more than $30 million in loan participations on the books in 2005, said Suzie Kislan, senior vice president of lending. KeyPoint Credit Union, with $700 million in assets, is considered an infant having just launched its program less than a year ago, said Juli Anne Callis, COO. From the onset, both credit unions knew there were certain market niches that were ripe for tapping. For Altura, it’s the large Hispanic population, many of whom have their own businesses while KeyPoint has seen a number of baby boomers launch their own firms particularly within the Asian community. “We were in a developmental stage for about two years because we needed to have reasonable expectations of where (business lending) would fit,” Callis said. “We are not the hare, we are the tortoise.” Altura has 1,200 clients in its commercial insurance division and is hoping cross-selling will help build up business deposits as well as loans, Kislan said. “The biggest challenge is watching risk rating on the small business side,” Kislan said, adding its first regulatory exam in this area is scheduled for April 17. Another early challenge for Altura was finding a business officer who had the expertise to service the loans. Last year’s success has moved the program along to hiring more experienced staff, delving into commercial vehicle loans and Visa business credit and debit cards, Kislan said. Looking forward five years, the credit union is aiming for $20 million in participations this year and $16 million in business and SBA loans. “This will take us where we need to be in deposits,” Kislan said. In one of the areas KeyPoint serves, Silicon Valley Bank “is the business bank,” Callis emphasized. That’s why the credit union felt it scored major points when it recruited one of its seasoned commercial lending officers from the bank, who is currently running the regional office strategically situated in a large Asian market in Cupertino, Calif. Business staff here are referred to as “gatherers” and are rewarded with incentives to establish relationships with the business community. “We incent people to learn more and get certified,” Callis said. “We bring in people from other industries and one of the first things they ask about is the technology we have in place.” For that reason, Callis strongly believes that the type of systems credit unions have will affect recruitment. For its part, KeyPoint is already off to an ambitious start. Its call center answers 200,000 calls a year. As its business program builds, KeyPoint is being very careful about the type of sectors it will not go into such as agriculture. Faith-based lending, however, is an area of interest, she added and it helps that one of KeyPoint’s staffers has expertise in this area. Still, the credit union doesn’t plan to box itself in and is open to refining niches as it moves forward, Callis said. In five years, both credit unions aim to have a number of additions in place including more business deposits and more staff well-versed in commercial lending. KeyPoint is shooting for 50% of its deposits to come from the business sector and is sure it will hit its MBL cap well before 2011. Altura is moving towards a small business lending institute model to provide additional training for its business services staff, Kislan said. The due diligence is bound to pay off, Callis predicts. “People are coming to this country for the first time and they have such an appetite for entrepreneurship,” Callis said. “In two years, we would like to have a well-oiled team. There are a lot of rewards, but we recognize that there are a lot of risks too.” -

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