FORT LAUDERDALE, Fla.-Pen Air FCU has come a long, long way since reporting earnings of just seven basis points in 2007.

Lending is booming, its product menu continues to expand, even as it continues to cut expenses. Describing his credit union as a "sleeping giant," interim CEO David Tuyo shared with credit unions the steps he and the management team have taken to wake up that giant.

First, some background to put its challenges into perspective. In 2004 Hurricane Ivan leveled its home market of Pensacola, Fla. In 2005, Hurricane Dennis followed. While seeking to rebuild, its market melted down with the rest of the country in 2006-2007. By 2009, it was beginning to feel something of a market rebound, but then the BP Horizon oil spill hit the Gulf Coast hard in 2010. In 2012, however, it is again seeing "signs of life."

"We knew that to take advantage of the crisis was going to take a tremendous amount of energy," said Tuyo. At one point challenges to Pen Air had many in management urging that it drop its tagline, "We get it done," because in the view of many, it wasn't. "I wanted to embrace it," said Tuyo. It has done so, and uses the "It" theme in much of its marketing, such as "Earn it" and "Choose it."

At the same time Pen Air FCU has worked to cut $1 million in expenses each year, it has simultaneously poured money into other initiatives, including expanded products and services and its market footprint. It had become an "aggressive" lender, according to Tuyo, and spent "hundreds of thousands of dollars" on training that he said has paid off demonstrably. It has also put in place a new member and loan application process, and is preparing to roll out an enterprise risk management program.


The Reason For Success

"But it was our people where we focused and that's why we are successful," said Tuyo. "We went from three projects per year to 30 projects per year. You want to talk about getting the staff excited? They were motivated-a little burned out-but they could see what we were getting them to buy into."

Tuyo said his first steps after being named interim CEO were:

* Setting clear expectations. "Every area focused on common goals."

* Sharing his Leadership Philosophy. Tuyo authored a four-page document about "what's most important for our team, our members and our community."

* Held Town Hall Discussions with staff. "Again, it's about the people. Yes, we were challenged economically, but I met with every employee of the credit union, some 300 people spread over 1,000 miles. It took me three weeks to do."

* Launched an internal and external marketing blitz. "We mmade sure to continue focus on employees," he said. "But we also refocued and redefined who we compete against: we always defined Navy Federal as our primary competitor, but they are not. We used Callahan software, or you can go to the FDIC website, and what we found was Regions Bank was our number-one competitor with 60% more marketshare than we have, and we refocused there."

Internally, Tuyo said Pen Air FCU has launched a leadership development program that includes three-year paths for each person. "It gets people excited about their futures. We wanted to focus on the art of possibility."

A product overhaul at Pen Air has also focused on people and not "stuff," said Tuyo. It has worked to develop its promise and to answer the question of "why we are here. We have promised to put the 'local' back in expert and to put the 'easy' back in your life."

All of that hasn't come without some pushback. Tuyo said that since launching its internal initiatives, it saw 100% turnover in lending staff, 100% turnover in marketing outside of management, and near 10% turnover in business development staff.

Those who have remained or been hired are earning more. "One thing we wanted to do was be the number-one place to work," said Tuyo. "The amount we pay in bonuses is up 400%; this year we're going to pay more than $1 million in bonuses."

All of that appears to come with solid ROI. "When I arrived we were doing about $8 million a month in loans; now we're doing $20 million," he said. "We have set new records in membership, loan production, Net Promoter Score above 90%, and employee surveys. Our ROA over last three years jsd grown 380%."

Pen Air has also launched a new CUSO for innovation called CU Spark, created a Pen Air Foundation, implemented new web services, online bill pay, ECM, business intelligence, mobile banking and more. It has rolled out affinity cards for two universitities, a hockey and a baseball team, and for local schools.

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