"I've been here for 10 years. When I got here, there was very high capital, like 30%. We've got it down to about 24%. One reason [for the decrease] is shares have gone down. We give back each and every day. Our savings rates are higher than most credit unions around here. We give bonus dividends each year. We give rebates on Visa purchases and check card purchases. We have a courtesy program and 80% [of members] are using it the way we intended. We've introduced a payday loan alternative. The only fees we really charge are those that discourage member use of things like bounced checks. Back in 1993, my predecessor had the good idea to do ATMs. "There are a lot of people who say our capital is high but our plan is to get it down through growth. We had a three-year period where we grew 80%. One of things we look at is the employee-to-member ratio. We have 600 members to every employee. Our peer group is 300 to every employee. "Are there any dangers with us having high capital? No. We do so much for our members. I was at a conference recently and was criticized by another CEO for having too much capital. I told him everything we do for members. I take [the criticism] very seriously but I know everything we do is for the members." "The credit union built that capital ratio over a long period of time. To me, that's a true testament to the leadership. I do not believe that members are not losing out on any benefits that any large financial institution would provide them. Right now, based on products and services we provide, [members] are able to get great dividends and have great access points. We believe that we're very competitive in providing rates on deposits and loan accounts. "I've only been here for over a year. The credit union probably started making the transition to electronic deposit services in the last five to seven years. By making that business decision, it has allowed us to stay competitive with retail banks. I cannot see adverse effects because of the high capital ratio. Besides being competitive in the market, you have to be aware of what the members want. We're driven by what the members want, not necessarily what's the latest product and service being offered. "We have a great responsibility in managing assets because they belong to members. We try to stay aware of what their needs are and how effectively we can meet them." "Historically, our credit union has always had a high capital ratio. The board has been very comfortable managing it that way. We've always been conservative in nature in the delivery of products and services. When we introduce something, it could be that we're slightly behind the curve, we're not the first to market. Our loan rates are below market and deposits are at market or slightly above market. Operationally, we've been lean. The difference, compared to our peer group, is our operational experiences. We've been known to be lean and mean. Another thing that keeps our ratio high is the credit union's board strategy is not to grow assets faster than we can pay out loans. Therefore, we've almost always been loaned out at 100%. Our ROA is 1.85. Our payback to members in bonus dividends is 97% to 99%. "In the last 18 months, we have budgeted for lower capital. The board is budgeting for a lower ROA which will reduce capital. We haven't really set a capital [level] that we're trying to drop down to. Over the last couple of years, we've maintained high capital and it has served us well in the past in opportunities to merge. We've done two mergers over the past two years. Some credit unions that have 10% capital and merge with a weaker credit union, it might take them down to under 8%, which could prompt [prompt corrective action]. We feel good about our position when we're pooling our interests during the merger process. If we merged with another credit union our size, we would probably go down to 12.50%. "One of the things we've experienced in our business model and approach to capital is when you're second or third to market with electronic services, once members have [those services] at another financial institution, it's hard to get them to come back. That's part of the detrimental side to [having higher capital]. We acknowledge that we've lost some members to things like bill pay." "The reason we remained well-capitalized is because we've controlled growth. We've had steady growth. Our operating expenses are dramatically below our peer group and it has been that way for a long time. We have a very supportive and stable membership. "The board and management have a high priority in maintaining high reserves. That's our formula. Members are not losing out in any way. We've continued to offer more services over the last five years. We've added share drafts and we will continue to add more services. We have one branch and we're studying adding more." "I'm a new CEO. I've been the CEO for about 18 months. My predecessor felt you needed to retain capital in order to plan for growth and to prepare for any dangers down the road. Since I've been here, my board thinks that 15% would be a good [ratio]. That's a big stretch for us. We're thinking about how we will spend money. Will we do a lot of products and service and add new branches? The capital we have now is outrageous. We're still making money. We have a new board, new management. Fifteen percent is more than adequate capital. The credit union I came from was 12%-and we had to work hard for that. The smaller you are, the more that rainy day fund is more important. "At the end of 2004, we expanded to nine counties. We're trying to figure out how to grow the credit union and give back. We're managing through difficult economic times."