By Ray Birch
CHARLOTTE, N.C.—There’s plenty of room for credit unions—and a lot of bricks and mortar—in a big bank market, according to one CU that has added 10 offices here in the last 28 months.
Truliant FCU entered the big-bank-heavy Charlotte-metro region in 2014 with a plan to introduce streamlined offices that focus on consultative services.
The move represented a sizeable investment for the $2.2-billion Truliant, which increased its overall physical footprint by nearly one-third. But CEO Marc Schaefer said the plan was not to build expensive, big offices that would be difficult to unwind if they proved unprofitable.
“We have 33 branches in our system now,” said Schaefer, who did not disclose the cost of the recent expansion. “But these new locations, with the exception of one new flagship office in Charlotte, are smaller and designed for personal interaction. So no teller lines. They are designed for our staff to speak with members and potential members about their goals for the future.”
High-tech video kiosks and cash recyclers can handle most routine transactions, and teller pods can be used when needed.
Schaefer said that the recession presented an opportunity for Truliant, headquartered in Winston-Salem, N.C., to expand into this market that is dominated by Wells Fargo and Bank of America (which is headquartered here), as well as other large banks. But the opportunity was not so much for the credit union to capture business and grow as much as it was to present consumers with a good credit union alternative, explained Schaefer.
“During the financial crisis we had some credit unions leave this market,” said Schaefer. “They decided that Charlotte is not where they wanted to be. Since we are a mission-driven credit union—our mission is to improve our members’ financial lives—we did not look at this market as a rich, fat market. We saw a bunch of consumers who needed a credit union that could meet all of their needs.”
Profitable Offices
Marc Schaefer
Schaefer said that Truliant entered the Charlotte-metro region with that thinking in mind, understanding that if it consistently worked toward its mission, that growth would naturally occur. And that is what has happened, the CEO told CUToday.info. All of the offices are moving toward becoming profitable.
“We have had some offices become profitable in less than 36 months,” said Schaefer.
Collectively, the 10 offices in Charlotte-metro through May had reached 104% of their loan goals and 88% of deposit goals for the year.
While Truliant is highly digital in its service offerings—for example, members don’t have to stop in to open or close a loan—the thinking behind adding all of the branches is that consumers still want a choice, according to Schaefer. Truliant also believes that in a bank-heavy market, especially one in which the reputation-poor Wells Fargo is present, consumers are looking for a financial institution they can trust and sit down and talk with without fear of being pressured.
“In this hotbed for Wells Fargo, you don’t really have to say much to consumers to have them understand the credit union is not going to push products on them,” said Schaefer. “It is not uncommon for someone to come to the credit union for a $50,000 car loan and leave with a $25,000 car loan and educational funds for their kids. People understand there is a big difference between what we do and what Wells Fargo does.”
Schaefer explained that with the exception of the flagship office in Charlotte, all of its other new locations are leases.
“We are not signing 20-year leases. So if one office turns out to be unprofitable, we can easily exit,” he said.
Truliant has been learning as it goes with the expansion, making adjustments to new offices as lessons are gleaned from locations that have been opened earlier. Schaefer said that the makeup of each office—the technology, the products emphasized, and the staff—are tailored to meet the local demographics.
Schaefer said the credit union did not blindly plunge into Charlotte. If first opened one office in Elon, N.C. to test the waters.
“That pilot office showed us that expanding into Charlotte would work,” said Schaefer. “Plus, we did a lot of research, spoke to a lot of credit unions here, and worked with an advanced branch design company before we pulled the trigger on the entire effort.”
Culture Transfer
A big concern with the expansion, explained Schaefer, is whether the CU’s culture would take hold uniformly across the new offices. To achieve that objective, Truliant used tenured employees to guide and train all of the new hires.
“Focus group research we just completed showed that we have done a good job with our culture here,” said Schaefer. “We found that these new members in Charlotte are saying the same things about Truliant that our long-time members have said for years—that they trust us and know we are working to meet their needs. That was very good to hear.”
With the increasing emphasis on digital delivery and even the appearance of artificial intelligence as a means to serve members, Schaefer is still confident branches are a good choice.
“I am not sure where things will be 20 years from now, but today we feel very comfortable that for at least the next ten years we will be effectively engaging with consumers in Charlotte,” he said.