FARMINGVILLE, N.Y. -- Teachers are arguably considered to besome of the most resourceful persons as they traditionally have todo more with less in their classrooms.

When school is out for the summer, many of them start smallbusinesses to tide them over until classes start up again in thefall. For the $2.6 billion Teachers Federal Credit Union, offeringbusinesses services to teachers as well as the educationalcommunity made perfect sense.

"For us, it's always about looking to what the members want,"said Robert Allen, president/CEO of Teachers. "Small business isone of the biggest growth areas."

The credit union has an extensive business deposit program thatincludes business checking, money market accounts, savings andshare certificates. Launched in 2004, the 2000 business checkingaccounts have a little over $5 million in deposits, Allen said.While Teachers also offers business loans, credit cards andcommercial vehicle financing, by far, most small business ownersgravitate to the deposit accounts first.

Founded in 1952 by a group of teachers, the credit union hassince diversified its membership to include all Suffolk Countyschools and universities and hospitals. Seventy school districtsare now served by Teachers. Doctor's offices are now a largesegment of businesses served, Allen said. The gamut also rangesfrom attorneys to floor covering installation and landscapingbusinesses. This in a county with 1.4 million residents.

"The big strength is we get diversification from some of thoseother groups. Hospitals are here to stay and school systems arehere to stay. So we don't have tremendous concerns about thestability of our membership," Allen said.

Teachers deliberately started out with business deposits firstseeing the entry as a faster way to build relationships. Businesslending and leases soon followed. The credit union has had to beefup its business development staff to keep with demand, Allen said.Most new accounts come from referrals. Yet, as with any newoffering it had undertaken, Teachers took a slow and conservativeapproach with business services.

"Back in the 1990s, we went into mortgage lending and even afterthat, members didn't know we did mortgages. Then there was therefinance boom," said Allen, who has been at Teacher's helm for 20years. "That's the way I kind of see it here [with businessservices]."

What has also helped to build Teachers' business deposits is theproliferation of mergers that have swept the area. Seven de novobanks emerged in 2007, Allen said. Commerce Bank had an edge withservice available seven days a week, but it just merged with acompeting bank, he added. Another major bank was acquired byCapital One. In their wake, competition has intensified,particularly as surviving banks go after the small businessmarket.

"We're usually the better deal. Our rates are going to be betterthan average. With the commercial accounts, the fee structure is abig item," Allen said. "Bank mergers, takeovers and changes inaccounts and fees cause people to shop."

Allen said while business accounts are profitable, "right now wecould go for commercial loans" with a loan-to-share ratio in the50% range and strong capital and return on asset levels. Most ofits real estate is performing well because of Teacher's local andresidential investments, he pointed out. Still, as the case at manycredit unions, there has been an uptick in consumer bankruptcyfilings, he noted.

"Nationally, Florida, California and Nevada have taken somehits. Most credit unions have the capital to withstand it, but ithas made us a little bit cautious," Allen acknowledged.

All those factors have not affected deposit growth, which "hasbeen hard to keep up with." Teachers is now considering addingremote deposit capture and mobile banking to its fold. Thesedecisions were made after a survey revealed that many countyresidents did not know they were eligible to join the credit union.As a result, more outreach to businesses, especially on the depositside, will continue.

"We're constantly looking at what's available in themarketplace," Allen said. "People are shopping more. For us,[business services] is a just a natural progression of what we do.Members will certainly tell us if something is working by theirutilization."

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