RIDGECREST, Calif.-Eric Bruen has seen little empirical data that shows small CUs have experienced little growth in 2012, but he argues that may not be such a bad thing.

Bruen, president and CEO of $21.6-million Desert Valleys FCU, which serves 3,983 members here, also has the perspective of being past chairman of the Shapiro Advisory Committee, a group set up by the California CU League to assist credit unions with less than $45 million in assets.

"My general impression was small credit unions did not see much benefit" from continuing consumer unhappiness with banks, Bruen told Credit Union Journal. "But I should point out our credit union had been growing steadily before Bank Transfer Day and we have been growing steadily since."

Bruen noted smaller credit unions generally are in smaller communities or serve a specific employer group and lack the marketing "firepower" as larger CUs.

"But it is not necessarily an obstacle," he said. "If small credit unions suddenly had 10% or 15% annual growth rates, they would find themselves in a bad capital situation in a short period of time. You cannot grow capital at the same rate as deposits, especially in this extreme-low-rate environment. I think having steady, healthy growth, and expanding consumer knowledge of the credit union brand, is good for all credit unions across the board."

Bruen said he is not certain small CUs need the same growth rate as large credit unions. Instead, he stated, the smaller ones need to be efficient and they need to know their members. "If a big credit union brings in 1,000 members, that is fantastic; but if a small credit brings in 1,000 members it may find itself overwhelmed in meeting the members' needs," he said.

One of the keys for small credit unions: the best ones know their niche and know their product, Bruen continued.

"The larger credit unions have economies of scale, products and services," he said. "For my little shop, we have been growing steadily 6% per year. If I wanted to heavily market and bring in members, I would find myself at the other end of the capital problem right away, because you don't build capital on members overnight-you build capital on members over long-term relationships."

In its March 2012 Call Report, Desert Valleys reported $11,262 in net income. Its net worth ratio was 6.1% ("adequately capitalized").

In 2011 it had $142,258 in net income prior to assessments. It paid $47,823 to the Corporate Stabilization Fund, which left it with $94,435.

In 2010 it generated $203,628 in net income prior to assessments, which left it with $155,999.

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