At the same time Pawtucket Credit Union has seen membership andassets swell, it has faced the challenge of helping membersstruggling through a time of high unemployment.

PCU President/CEO Karl Kozak noted unemployment in Rhode Islandis currently 11.5%, the fifth highest in the nation, and has beenas steep as 13%.

“It's definitely had more of an impact on us than some of theneighboring states,” he said. “We've been doing a lot ofmodifications. We've had a modification program in place for closeto two years now. We've helped 150 families and modified more than$20 million in loans, primarily home loans.”

Kozak said he thought by now he would have seen a lot moreimprovement in the economy. But high unemployment and slumping homevalues continue to be stubborn problems.

“It definitely keeps us tossing and turning at night,” heindicated. “Fortunately, we've been able to deal with it and remainprofitable. But it's come at a cost. The NCUA assessments on allcredit unions are another issue. It's affecting credit union growthfor the industry as a whole as well as us. Maybe after next yearthose assessments will be a lot lower.”

When Kozak joined PCU as president/CEO in 1991, the credit unionhad one office and $120 million in assets compared to 13 branchesand $1.2 billion today. He links PCU's growth and profitability tothe credit union's employee culture.

“We've grown tremendously in the last 20 years, but we still tryto make it a family-operated credit union,” he explains. “We offergood employee benefits, but most of all we try to keep a consistentculture.

“When I walk in the door I like to be able to face my employees.It means a lot to me. Last year we came in number three in a[Providence Business Journal] survey of best places towork.”

The award was based on employee evaluation of factors such asinnovative benefit programs, flexible work arrangements, consistentopportunities for advancement and personal development.

From the members' viewpoint, the PCU culture is reflected inexpanded branching into the communities the credit unionserves.

“Some of the big banks keep getting bigger and merging,” Kozaksaid. “We've stayed local. We have a small state, so it's easier tohave a larger presence.”

If growth is to continue, the credit union-like the rest of theindustry-realizes it must attract younger members. For example, in1996 PCU began granting scholarships, recently allocating four-yeargrants totaling $32,000 to four area high school students.

PCU also hosted a Real World Day which saw more than 400students apply lessons from a financial literacy program. Theprogram guides students in identifying financial management goals,developing a budget, realizing the costs of using credit, andunderstanding products such as checking accounts, savings andCDs.

“We do attract young people, but it's a tough group to engage,”Kozak acknowledged. “When I say 'young,' I'm talking about peopleunder 20 years old. They get serious when they get ready to buy acar or that kind of thing. We're trying to get the families, theparents, in on this too.”

“You do have to have the mechanism. We did some advertising onFacebook, which hasn't produced much. We're looking into mobilebanking. We have to be positioned so when they do get serious,we'll be there. It's like Generation X. When we first startedtrying to attract them, it was similar. Now they're our biggestborrowers.”

PCU's growth is also reflected in expanded branching intomultiple localities. Kozak believes the credit union has lured agood cross-section of those communities. The credit union is makingan effort to reach out to the expanding Hispanic population andposition PCU as a friendly place for Hispanics as well as otherresidents to bank.

“We want to maintain our good citizenship throughout ourcommunities,” he indicated. “Opening branches throughout the stateis still a strong goal-continuing to grow and be profitable. Stillanother goal is keeping up with technology. Members from youth toretirees use all forms of technology, but they want branches aswell as technology.”

With a degree in accounting and some experience in publicaccounting, Kozak moved into banking in 1980. Five years later heentered the credit union industry, and after six years accepted ajob as president/CEO of PCU.

Married with two grown children and a granddaughter, Kozak likesto simply spend time with his family. You might also find him onhis boat fishing, or polishing his swing on a golf course.

But driving to the water or the golf course can be frustrating,he added. Although he doesn't have political ambitions, he doeshave a daydream about one reason for wanting to become president ofthe U.S.

“One thing that absolutely drives me mad is the nonstop,constant road construction. It seems as though it's been going onfor at least the last 10 years. I sometimes say that if I ran forpresident I'd run on a ticket that we'd take four years off fromroad construction and give everybody a break,” Kozak declared.