SAN DIEGO-Stan Abrams is a native Californian who has worked in the credit union industry for 36 years, and was very familiar with San Diego before coming here to be president and CEO of $257-million San Diego Metropolitan Credit Union.

But even forewarned, Abrams did not realize the full extent of the challenge of operating a CU in this market.

"It is a hyper-competitive market because on every corner you will find something that has financial institution written over it-a branch, a kiosk or an ATM," he said. "There are four credit unions with more than $1 billion in assets, plus a couple around $700 million, plus the largest credit union in the world, Navy Federal, has a number of branches. Most of the 24 credit unions in and around San Diego have community charters."

With that said, Abrams added he does not believe competition is a bad thing. He said the atmosphere helps San Diego Metropolitan "fine-tune" its strategies and makes it "sharper, more focused on what we need to do as individual credit unions and how we serve our members."

"Most of us are working on how we are different," he said. "I think consumers look at banks and credit unions as commodities, because in their eyes we have the same products and services. It is important to find a niche or niches that work in the business model. We were organized in 1934 to serve employees of the City of San Diego, their families and retirees. Over the years we have added a number of SEGs, and in 1998 we added a community charter."

Today, San Diego Metro's core membership remains the City of San Diego, plus affiliated groups such as the San Diego Police Department. In an effort to serve that particular niche, Abrams said the CU created a special loan product a number of years ago called the "1010 loan"-a nod to the police code for "be ready." It is a bridge loan that helps new officers purchase their uniforms, gun and other equipment until they are reimbursed.

"The 1010 loan is a very good product for us," he said. "We also offer an energy efficient loan that really is two products. One is toward conservation, used for new insulation, heating and air conditioning units. The other is for solar systems, something that is not offered by many institutions. We also partner with the City of San Diego with the mayor's energy conservation initiatives on insulation and HVAC systems."

The quest to find ways to differentiate, to stand out and to improve service levels, never ends, Abrams continued. He said San Diego Metro provides more delivery channels by belonging to the CO-OP Network and shared branching.

"We have three branches plus a phone branch, which is a 24-hour number for new accounts and loan applications, plus we offer online banking and text banking," he said. "We are currently evaluating mobile banking and how it fits into our broader wireless strategy."

In 2011 San Diego Metro reported $1.5 million in net income prior to assessments. It paid $576,330 to the Corporate Stabilization Fund, leaving it with $926,000 in net income. Its net worth ratio was 6.49% ("adequately capitalized").

In 2010 it lost nearly $2.1 million, including $611,000 in assessments. Its net worth ratio was 5.89% ("undercapitalized"). In 2009 it lost $7.7 million, including $1.9 million paid to the NCUSIF. Its net worth ratio was 6.51% ("adequately capitalized").

In 2008 San Diego Metro lost $11.3 million, with a net worth ratio of 6.31% ("adequately capitalized"). In 2007 it lost $1.4 million, and its net worth ratio was 10.77% ("well capitalized").


Informal Collaboration

Abrams has only been CEO at San Diego Metro for two years. Prior to that he was at Vista FCU, which is now Partners FCU. He noted he has worked in several markets that are densely populated with financial services, including Los Angeles/Orange County, the San Francisco Bay Area, and Orlando, Fla.

"I love working in San Diego. It feels like any other large city where there are a lot of financial institutions. None of us can get away from it, we have to figure out a way to compete with well-managed competitors that are very strong. There are about 1.3 million people in San Diego, with 3 million in San Diego County. The entire county is smaller than the city of Los Angeles, but there are a lot of financial institutions competing for market share. A lot of our members have multiple financial institution relationships."

Abrams believes San Diego's credit unions do a good job of cooperating with each other. He said he has "great respect" for the CEOs and their boards, and is pleased to be part of an active political action committee. He noted Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues, recently hosed a CEO roundtable in the area.

"I know most of the CEOs here and we have always had good business relationships," he said. "I have not hesitated to call and ask for help and they have been very good at offering assistance. We reciprocate as best as we can. Everyone sees the benefit of collaboration, even if there is not anything formal. Obviously we don't provide our strategy, but there is a lot of openness with each other as a movement."


'Not A Bad Thing'

Although Abrams said he is more than willing to bounce an idea off another CEO in town, he also keeps in mind a belief that, "everybody is a competitor; it would be naïve to say we are not. That's not a bad thing-it provides better services for consumers. We keep the banking industry here in San Diego very honest by not charging excessive fees. Competition is good because it keeps us focused on how to grow market share and continue to be strong."

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