WAUWATOSA, Wis. – CSMC, Inc., doing business as Central StatesMortgage, is five months away from celebrating its 22nd birthday,and there's one thing for sure – what started out as a privatelyowned company is now one of the most successful multi-owned CUSOsin Wisconsin and is no longer just about mortgages, but has morphedinto five market areas and eight business subsidiaries.

For its first 13 years, Central States had no credit unionshareholders, but was privately owned by people who managed theWisconsin Credit Union League's mortgage program as well asmortgage services for several Wisconsin credit unions. The companywas actually called Midstates, and it had a division called CentralMortgage. The two names were merged in 1991. After developing anexpertise and relationships with credit unions, the company held astock sale in 1997 and sold 51% of its shares to credit unions andthe Wisconsin league. The CUSO is now 72% owned by the league andprimarily Wisconsin credit unions, as well as two CUs in Illinois –Du Page CU, Naperville, and Sherwin Williams Employees CU, SouthHolland. Over the last nine years, the CUSO has evolved to the formmost credit unions associate it with now. In 1997, it started outwith three lines of business – a mortgage company in Central StatesMortgage; a title company in Premier Title; and an insurance andfinancial services subsidiary in Central States Insurance andFinancial Services. CSMC, Inc. now also includes a real estatebrokerage company for residential real estate, Homesale Realty; anaffiliate that sells and leases commercial real estate, EquityCommercial Real Estate; an auto leasing and sales subsidiary, CUFleet; Direct Mortgage Funding, that does wholesale andcorrespondent lending operations; and Interstate Financial, aretail, subprime lending operation.

Consider the following statistics:

* In 1977, Central States had 40 employees and $2.7 million inrevenue. In 2005, CSMC had more than 500 employees and independentcontractors, $76.8 million in revenue, and $114 million inassets.

* Central States and Direct Mortgage Funding funded over 7,700loans for over $1.1 billion in 2005.

* Premier Title acted as the closing agent and title agent onover 8,800 transactions in 2005, and is the largest issuing agentin Wisconsin for Stuart Title Guarantee.

* According to Wisconsin's Department of Transportation'smonthly report, CU Fleet is typically either in first or secondplace as the largest independent leasing company that's not part ofa national franchise. * CU Fleet is also the first or secondlargest independent car dealer in Wisconsin. * Homesale Realty foreach of the last 12 months was the sixth largest real estatecompany in the Multiple Listing Service reports in Wisconsin. CSMCPresident Dick Jungen attributes the company's success to itswillingness to be flexible in new businesses. He admits though that“depending on who you ask, some say we're not flexible enough, andothers say they're happy we keep our eyes and ears open for newopportunities.”

He adds, “Our overriding strategy is to create a unique group ofcompanies to serve credit union members.” Despite the diversity ofits business lines though, Jungen says there is a common threadthrough all of them, “We're lending money to members for theirbusiness or personal needs and providing ancillary products andservices to complete the transactions for them. We can help themfind a car and get it leased or financed. If they want to buy ahouse, we can help them find one and finance it for them.” Jungensays he considers Central States to be a leading edge company.

“We step outside the box in every area. Most mortgage bankingcompanies just do mortgages, real estate companies just do realestate. They don't marry themselves to products and services to getthe whole job done like we do.”

Looking ahead, Jungen says most of the growth in the future forCSMC will be “organic growth.” Instead of starting newsubsidiaries, the CUSO plans to expand its mortgage business – itcurrently has offices in eight states and is licensed to dobusiness in 13 states.

The CUSO has marketing agreements with more than 300 creditunions in the Midwest to provide them with a variety of mortgageservices, and has joint venture marketing agreements with theWisconsin, Iowa and Illinois credit union leagues as their endorsedmortgage company partner.

Central States also has a mortgage marketing partnership withCU*Answers' Xtend CUSO in Michigan to provide mortgage services forthat CUSO's 31 shareholders. -

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