ANTIGO, Wis. — There's no magic formula when it comes to meeting members' needs, but finding ways to bring value to their financial lives has helped CoVantage Credit Union to consistently rank high in the “return to member” category. Measuring the value that members receive from their credit unions is tied to lending, savings and product usage, according to Callahan & Associates, Inc., which developed its Return to Member Index more than a decade ago. The index provides a raw score for the three usage areas and assigns a percentile ranking from one to 100 based on the scores of the other credit unions in their peer group. The final ROM score is a weighted average of these percentile rankings that is then assigned a percentile rank using the same peers.

CoVantage ranked sixth in the nation among credit unions in the $500 million to $1 billion asset category with a total raw score of 87.93 as of Dec. 31, 2006, according to Callahan. Beyond the numbers, the $575 million CU is constantly seeking out ways to add value without increasing fees, said Brian Prunty, president/CEO of CoVantage.

“If you have 50,000 members, it's one thing for them to have one account but it's another thing if you have 50,000 members and they each have three accounts,” Prunty said. “If we do our pricing right on deposits and loans, new members will come.”

Prunty admits that the credit union does not set targets for membership growth rather choosing to target product usage per member. In its quest to become a member's primary financial institution, CoVantage wants each of its 48,500 members to have at least three accounts. Prunty said historically, the CU has had strong membership growth including bringing in 10,000 new members as a result of three mergers in 2004 and 2005.

Even though CoVantage is located in a remote area of the state, Prunty said the CU competes against 20 financial institutions in the area. For that reason, CoVantage prices its deposits and loans aggressively, which increased $47 million and $41 million in 2006 respectively. Loan growth has grown in part because of the CU's 25-year track record of offering loan interest rebates. In 2006, members received a 5% interest rebate and ultimately, it's “such a huge way to reward members for ownership.” The CU also keeps the fees it charges members thin including fee-free checking and free overdraft protection. Prunty said because CoVantage's overhead is kept low and operating expenses are closely watched, the CU's fee income is “significantly lower” than its peers. Another critical part of the relationship building equation, are the financial service representatives and loan officers who are constantly on the lookout for how they can find value for members.

“If a member has a car loan and credit cards [elsewhere], we try to get that member to transfer to our lower rate credit card,” Prunty said. “Everyone who signs up for checking, gets an overdraft protection loan.”

CoVantage discovered that some who wanted to open checking accounts could not due to their credit scores and other factors, Prunty said. To help that segment, the CU is set to roll out in the third quarter a transitional account with a check card that is preset with a certain spending amount.

Prunty, who has been with CoVantage for 17 years, said while some believe CUs have just entered the business lending arena, many have been offering such loans since the early days of their respective charters. CoVantage approved loans for farmers and loggers in the 1950s, Prunty pointed out. Today the CU's $430 million loan portfolio includes $97 million in commercial loans. CoVantage has also been a Small Business Administration lender for 10 years.

“We've got the margin squeeze going on,” Prunty said. “We try to fit where the demand is but we're not as aggressive as we have been in the past.”

Finding its niche is probably tied to CoVantage's branch locations. While the CU hasn't opened a new location since 1998, it picked up four branches with its last three mergers for a total of eight, but there are no immediate plans to build in new areas, Prunty said. In 2006, CoVantage did open a new 48,000 square-foot, three-story main office with extra space to build on one more floor. It was time for expansion given the CU had been in the same building since 1975 and had added on several times. Get 'Em While They're Young

Keeping the expansion theme in mind, like many CUs, CoVantage has recognized the importance of reaching out to young people. The CU is currently working with middle schools in four school districts to bring GooglePlex's financial literacy program into the curriculum. Unlike actual physical branches in schools, the student-run CU is incorporated into classroom studies. Prunty said the goal is to add on two such arrangements each year with immediate plans to work with two more schools over the next few months. It costs roughly $3,000 to run such programs.

“We feel that middle school is a good time to develop strong financial skills,” Prunty said. “It's been great because the staff and the teachers are so involved.”

When it comes to attracting younger members, Prunty said CoVantage is pretty unique in how relationships are built. Describing it as a “barbell membership,” members tend to go off to college, come back to the CU after graduation and end up retiring there.

“The average age of our members is 48. We get a lot of senior and youth members and I think we got a better shot of keeping them members forever if we start building relationships early,” Prunty said. Many senior members live on a fixed income and some were concerned that there was not enough money coming in to keep their homes–”we knew we had to get real serious about helping them.” By Labor Day, CoVantage is prepping to launch a reverse mortgage that has “significantly less costs and more favorable terms” than other counterparts in the market.

Learning about the financial habits of its senior members and the need to establish relationships with young people have come through CoVantage's annual member surveys. The CU started the surveys in 1996 and today, sends out 500 random surveys each year. Prunty said in the beginning, there were some complaints, but CoVantage can track information by location and other factors, which helps improve service.

“We're a very mission focused credit union,” Prunty said. “We realize part of our mission is to support thrift and we need to focus on all aspects of being a great credit union be it through serving young people and people of modest and low means. We still make $50 loans. It's a part of our culture.” –[email protected]