KEY WEST, Fla.-Monroe County Teachers FCU here has come a long way since its CEO was brought in believing he would be there only long enough to prepare the credit union for a merger.

Since then, assets at Monroe County Teachers have more than tripled. And five years later, CEO Gerald Bolduc is here to stay.

Bolduc, a former NCUA field supervisor who had retired in 2004, was asked by the agency in 2007 to take over the credit union after its CEO had admitted to stealing more than $1.25 million. Bolduc expected the job to take only a few weeks, and that he would mostly be helping the CU get its books in order in preparation for being acquired by another credit union.

"When I met with the board, rather than being embarrassed, they were very mad and wanted to make a go of it," he recalled. "I said we'll give it a shot."

The result of those efforts-increased lending, a diversified portfolio and more than 200% asset growth-led to Bolduc recently being named NAFCU's "CEO of the Year" for CUs with $150 million or less in assets. MCT FCU held about $5 million in assets when Bolduc came aboard; today it has nearly $17 million in assets, serving about 1,500 members.

To give it a shot, Bolduc quickly got to work, renegotiating vendor contracts to reduce operating expenses across the board by as much as 30%. In addition, MCT FCU began repricing by lowering rates as it sought to build its loan portfolio. Coincidentally, at the same time MCT FCU was looking to get back on its feet, the largest credit union in the Florida Keys (today known as Keys FCU) was dealing with its own issues, having gotten "caught up in the real estate fiasco" and was operating under NCUA conservatorship at the time.

A Doubling of Assets

"They were facing their own problems and not making a lot of loans, so I was able to go out to the dealers and convince them to finance through our credit union through 'Buy Local Finance Local'," said Bolduc, referring to a program he instituted early on. As that program took root the credit union begin to see loan apps growing, he recalled.

"We grew from $5 million to $10 million within the first two or three years," he said. "We started making money, so it wasn't a problem paying a higher cost of funds, because even though we were offering lower interest rates on the loans, the average was still higher. Not everyone was an A or B, so our loan yield was right around 8%."

The credit union also expanded its field of membership to include students, brought back club accounts (including a 4% rate), offered in-house rewards for debit transactions and more. Part of that rewards program included offering an additional 25 basis points on CDs if that user made eight or more debit transactions per month, as well as loan discounts. "That move actually allowed us to start making money on our debit card program, because of the interchange income; we were losing money on it before."

Bolduc said that youth membership (age 18 and younger) is up dramatically at the credit union, rising more than 20% this year alone. MCT FCU also introduced Stand Up For Education, an association of the CU that allows consumers to join who might not otherwise have been eligible. Membership through that association costs $10, which the CU funnels into a scholarship fund for children. Awards are given in increments of $250, and this year the CU awarded $2,500 total.

A big loan driver for Monroe County Teachers has been used cars. But it has also benefitted from a bit of good luck. MCTFCU had only a few mortgages on its books when the economic crisis hit, it also has been able to grow that end of the business while other FIs have suffered, especially in Florida. The credit union's policy is to only finance up to 80% of the appraised value, and in some cases it gets 40% or 50% equity when going into a loan. It also limits real estate to 40% of its overall lending portfolio, and does not sell the loans.

"We can make as many as we can afford to fund."

Bolduc said his board has given him carte blanche to be flexible so that it doesn't lose business to other lenders, particularly for quality applicants.

Bolduc said that his philosophy is not necessarily to try to lead the market on price, but it does happen on occasion. He noted that there are only three CUs in the Keys, and the other two are either in conservatorship or not as aggressive with pushing loans as MCT FCU. "None of the banks here are big on auto loans; our only competitor in the market is the captive auto lenders."

"If we give somebody a 1.75% or a 2-something-because we match anybody's rate-we can afford to do that because we're dealing with a C average," Bolduc said, adding "We look at the character, and if they have a good job, we make a lot of C loans."

Bolduc knows a little something about the car loan business. His first job out of college in the late 1970s was collecting on delinquent auto loans. "If a person is having problems, we will work with them as long as they work with us," he said. "If they don't, we go after them quickly; within two months it's repo'd."

Making It Better For Next CEO

Monroe County Teachers FCU doesn't spend much money on advertising, so most of its loans come from word of mouth, as well as good relations with the community. Upon arriving at MCT FCU, Bolduc joined the local Rotary Club, Navy League and other community organizations, and he also has warm relations with local bankers who send him deals they can't do.

Bolduc no longer expects his time in the Keys to be a short-one. He recently signed a contract that will keep him at the helm until 2015. "I love this credit union, but I don't want it to consume me," he said, adding "I want to make sure it's in safe hands and is at a point where it's a lot easier for someone else than it was for me."


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