Redstone Federal Credit Union is posting growth numbers that would make many CUs green with envy.
The Huntsville, Ala.-based credit union has averaged 2,600 new members each month throughout 2018 and was recently honored with the Credit Union of the Year award from the National Association of Federally-Insured Credit Unions in recognition of those results
Representatives of the $3.5 billion-asset credit union attributed some of the growth to a change in the culture of the organization. While the credit union’s origins are similar to many others – Redstone was first chartered in 1951 when 11 members each placed $5 in a shoebox – today it is a multiple common-bond credit union and has relationships with various groups.
According to Fred Trusty, Redstone’s EVP and chief marketing officer, much of the recent member growth to is the result of in-depth user analysis, effective marketing and heightened technology.
“One item we are working diligently on is to acquire more members through our website and not having them come into our branch,” said Trusty. “This is based upon that over 60 percent of our new members are millennials or Gen Z, and they mainly prefer this channel and it is less costly per acquisition versus going into a branch.”
Other tech initiatives include an online banking system that allows members to take advantage of pre-approved loans. Redstone also utilizes Interactive Teller Machines (ITMs) that operate similarly to that of a team member, but do so outside of business hours. Members can access ITMs in Redstone drive-thru window between the hours of 7 a.m. and 6 p.m. on weekdays and Saturdays from 9 a.m. to 5 p.m.
The credit union earned more than $17 million in net income during the first quarter of 2018, following a showing of $38.4 million for 2017. Redstone’s most recent call report shows more than $1.8 billion in loans and leases, including more than $743 million in auto loans, approximately $115 million in commercial lending and more than $535 million in real estate lending.
Redstone is also examining expanding its branch footprint. While the credit union regularly analyses household penetration in markets where it has a physical presence, it has begun to focus on areas where it’s branch network isn’t as strong. To complement those efforts RFCU has also increased the attention it pays to its select employee groups, boosting involvement with its top 10 SEGs.
The credit union also operates branches located in Hartselle High School and Alabama A&M University, and plans to expand to two additional high schools and a community college this fall. It has also expanding its community outreach, including a recent partnership with local TV station WHNT to help expand a weather tower cam network. In an area prone to tornadoes, the weather cam is another way, from Redstone’s perspective, to be there for its community.
One of the biggest challenges moving forward, said Trusty, is increased competition – and not just from the traditional players. Trusty said Redstone identifies competition as “any entity fighting for a prospect financial asset,” meaning that the CU’s marketplace is not only limited to local financial institutions, but also to national banks, non-traditional players such as Amazon and Walmart, and specialized fintech lenders.
On top of that is a new generation that, as Trusty observed, “might have the perception that it is better to spread financial assets with various financial institutions versus having the assets with one financial institution.”
These challenges have been incorporated into the CU’s long-term goals. In 2017, Redstone worked with Chris DiCenso of Growth Strategy Partners to develop new strategic plans, one that includes giving back at least 40% of budgeted net-income to its members.
According to Trusty, RFCU will accomplish this goal by continuing to increase engagement with members, a measure that starts by ensuring everyone can easily access all of the products the CU offers.
“Our employees understand that they are responsible for the member experience,” President and CEO Joseph Newberry said in a statement. “Each employee takes ownership for the results each time they brightened a member's life.”