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Are you an ostrich or an eagle? Is your head in the sand? Or are you soaring above the forest looking for opportunities? Let’s pretend its April 2011. Our 401(k)s are now only 20% below what they were in 2007. People are back to work, health care has been fixed and the big bank corporate bonus scandal is over. And you’ve been paid back for your contribution to the Corporate Stabilization Program. OK, maybe not the last one. Unfortunately, the courts are still working out who will be the winner of the Coleman/Franklin Minnesota Senate race.Sitting in your office in 2011, are you saying, “I sure wish I would have taken advantage of the opportunities in 2009 and positioned my credit union for today’s (2011), upswing in the economy?” Or are you playing catch up and just starting your branch network planning? If you were an eagle, 2009 might have been the best time in years to take advantage of the opportunities in front of your beak and branch or remodel. Why?No. 1, consumers’ confidence in big banks is down. This is a huge opportunity for community credit unions known for providing very personal and local service. So swoop down and try to gobble up a larger market share in your community with better branch locations and very specific marketing campaigns.No. 2, construction pricing is very competitive right now. A simple assessment that architects use to determine what the construction market is like is the number of phone calls received from contractors to “see if they can bid on anything?” The number of these calls has gone through the roof. Among other things, the reduction in residential construction has caused residential subcontractors to go after commercial projects. This has created intense labor competition between subcontractors, which in turn should benefit credit unions. At the same time, it is imperative you work with a general contractor who has built multiple credit unions.As a rule of thumb, it takes 12 to 18 months to select a site, plan, design and construct a new facility. Because it’s now April 2011, 2009 might have been the right time to begin that process. The stock market mantra “buy low” might have never been more applicable regarding the purchase of a site.An excellent strategy could be to purchase a site back in 2009 and sit on it. Then when the economy starts to heads north, you can begin the design and construction process. Another suggestion is that while you wait to build your next branch and watch the economy, you should consider a remodel. Remodeling your main facility or one of your branches is generally more economical than building a new branch facility. A remodel will not only allow you to develop and reinforce your brand, but it will also give you a chance to reduce ongoing operating costs and get rid of that rust-colored, shag carpeting.No. 3, and certainly most important of all, there were more great sites and buildings available back in 2009 than there were from 2003 through 2008. In 23 years of helping financial institutions find sites, I cannot remember a time where available sites were so plentiful. These are not just OK sites, but what we call ‘A’ level branch sites, fall out from businesses that have failed and need to sell their buildings. Developers are frantically looking for buyers. Speculative retail mall properties that were planned for in front of the big box grocery stores are now available for financial institutions.With site selection, please remember there is a right way and a wrong way to select a site. There is a mathematical methodology to determine which site will perform best for a credit union. Arby’s, Wal-Mart and Walgreens always seem to be in the right locations. These groups do this by using their own mathematical model.The wrong way of selecting a site is to just call a real estate agent and see what properties are available. Nothing against real estate agents, but their job is to sell property, not evaluate it. You need someone who knows the retail patterns, access and egress, visibility, household demographics and the necessary statistical data used to evaluate possible sites for credit unions. Margins are so tight right now (oops…back in 2009), you cannot afford to make a multimillion dollar mistake and put your next branch in the wrong location.Convenience is still the No. 1 reason people bank where they do, so the old adage of location, location, location still applies. You need to be where the people are to continually reinforce your brand. If they don’t see you, they don’t know you. Branches are still the primary delivery channel for credit unions even if Gen Y is your target market.Folks, the economy will turn around. Maybe it’s because I’m from Minn’e'soda (“Yah, sure. Don’t ya know”) that I have a positive outlook. Or, maybe it’s because I just won the lottery last night. But from the eagle’s vantage point, 2009 is the time to take action. Position yourself so that in 2011 you’ll be saying you are glad you took advantage of opportunities in 2009 to put a branch strategy plan in place.

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Peter Westerman


Credit Union Times

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