Northwest Credit Unions’ Strategies are Resulting in Deposit and Loan Growth

8/21/18

Northwest credit unions saw outstanding first-quarter loan and deposit growth, topping other states in both areas and proving once again that credit unions in the region are reaching their members in innovative ways, as well as gaining new ones.

Northwest loan growth during the first quarter, according to the National Credit Union Administration, far outpaced the national average of 5 percent. In Oregon, loan growth was at 11 percent, Washington saw 10.3 percent growth, and Idaho saw 9.1 percent.

“The majority of our growth has come through our dealer program; however, we continue to see organic growth in other loan products as well,” said Rhonda Heile-Brown, Executive Vice President and Chief Operating Officer at Oregon State Credit Union in Corvallis. “We have seen positive, steady growth in auto, home, and business lending. We continue to see loan growth from existing members, as well as from those who have joined through Oregon State’s dealer program,” she said.

“Commitment to service, member loyalty, and word-of-mouth, as well as consistency in our underwriting standards,” are the internal factors that led to loan growth, she said.

At Lewis Clark Credit Union in Lewiston, Idaho, loan growth is attributed to both organic and indirect lending, said Trisha Baker, President and CEO.

“We work very hard to provide attractive loan promotions to drive organic growth and have been very successful in creating a promotional lineup that our current members are excited about and also attracts new members,” Baker said. “We’ve seen great growth this year by participating in the dealer off-site sales and building strong business relationships with the dealerships in our area.”

While most of Lewis Clark’s loan growth has come from auto loans, the credit union has also worked to increase all other areas of its loan portfolio, Baker added. “We are seeing some good growth in our home equity portfolio, which is up 12 percent – $1.3 million. With new indirect members, we work to establish more than just loan accounts and provide them with a new member welcome packet that explains what we are all about.”

Internally, the credit union motivates staff members in a variety of ways to build membership.

“Creating fun challenges for our staff helps spread the word from employees both inside and outside of working hours,” she said.

Deposit growth in the Northwest is strong

The northwest also saw strong deposit growth, with Washington seeing 5.2 percent growth, the fifth strongest in the nation.

“We’ve been blessed with a membership that needs to borrow money and is able to pay it back,” said Brian Bahs, President and CEO of Washington Contract Loggers Association Credit Union in Olympia, Wash. The credit union’s membership is tied to the timber industry.

“A modern logging operation is extremely capital intense, and overall, our membership is a ‘net borrower,’” he explained. “The challenge is finding funding sufficient to meet the demand for credit from our membership. We’ve been putting market leading rates out there for the past year, but there is only so much deposit capacity in our membership.”

WCLA is focused on keeping its membership strictly in the timber industry. It has sought out deposits from other credit unions in Washington and is aggressive in pricing its offerings on the CD brokerage sites in order to fund the loan demand. The Washington State Department of Financial Institutions granted some assistance in managing WCLA’s non-member deposit limit, but there is only so much DFI can do, Bahs said.

“Loan participations sales provide some funding. During the past several years, we have sold nearly 10 percent of the loan portfolio, but the appetite for logger loans within the credit union community has been modest,” he said. “Credit unions just don’t see the opportunity here. A credit union with the scale and willingness to sustain an annual flow of purchases would be a great partner, and WCLA would provide a terrific investment for the purchasing credit union, while they would help us meet our members’ needs.”

Other first-quarter Northwest successes

Idaho saw 5.8 percent deposit growth during the first quarter and Oregon saw 3.9 percent. In addition, asset growth was at 6.9 percent in Idaho and 5 percent in Washington. All three states saw strong membership growth, return on average assets, and net income.

For a deeper dive into the NCUA first quarter data, please see the U.S. Map Review.

Posted in Industry Insight.