By Ray Birch
BESSEMER CITY, N.C.—One small credit union that has nearly 1% ROAA and strong account penetration per member says everything starts with lending, especially in a little town.
Lithium Federal Credit Union here has that high ROAA, in addition to approximately three accounts per member, which landed it in the top ten of Callahan & Associates’ Return of the Member rankings for small shops.
CEO Eric Campbell emphasized that lending—not a checking account or any other service—is where things start for his $13.2-million organization in this town of 5,500 people 30 miles west of Charlotte.
“We have generous lending policies, and we wouldn’t have those excellent numbers and be ranked high in Callahan's index if we didn't,” said Campbell.
According to Callahan & Associates, its Return Of The Member index offers a “comprehensive view
of the value a credit union returns to its members. The calculation weighs three core credit union functions — savings, lending, and product usage — by taking into consideration aspects such as loan and deposit rates, the number of products and services offered, and member participation, the company explains on its website.
Eric Campbell
People Talk
“We are a strong lender. We find a way to make the loan happen for members. We go to bat for them,” said Campbell, who added Lithium will loan to FICO scores as low as 500. “When the word gets out that you like to lend…”
But what is more important to recognize is that if the CU does not like to lend, that word certainly gets around even faster.
“People talk, especially in a small town. If you're not a strong lender people will know that even before they consider where to go for a loan,” Campbell explained. “You need to be known for lending--that is number one--or people won’t come to you for other services. And it needs to be known you are flexible with your lending policies and for working closely with members to help them with their unique needs. That is what works, at least for us.”
The credit union recently improved its online lending platform, mobile banking platform and added e-signature to give members greater convenience and speed of loan application and funding.
“You've got to be flexible and meet people where they're at,” Campbell said.
Slightly Higher Delinquencies
Lithium FCU’s delinquencies and charge-offs reflect its relaxed lending approach, but Campbell added risk-based pricing absorbs the losses.
“We're probably a little bit higher than peer on both charge-offs and delinquencies,” acknowledged Campbell.
The credit union’s first quarter 5300 shows its loan portfolio at $9.23 million, with $519,000 in loans 30+ days delinquent.
Lithium FCU does offer attractive rates for borrowers with strong credit. Personal loans are as low as 8.9%. Auto loans out to 36 months are priced at 3.99% for the best credit—5.25% for 72 or 84 months. Used car loans are priced at 5.99% for 60 months.
“The last few years we've increased our savings rates, and we may have to increase those again,” said Campbell. “Our CD rates are fairly good. We're paying 3% on IRAs right now, and that may need to go up as well.”
The Goal
The goal is to try to return as much money as possible to members, he said.
“Most of our givebacks, in addition to low loan rates, are through regular dividends on certificates and share accounts,” he explained. “A few years ago we did do a return on loans—if you had loans with us we would we would pay some money back on those loans. But we haven't done that in the last couple of years since the pandemic hit. But that may be an option going forward.”
Beyond favorable lending policies and good savings rates, Campbell said Lithium’s service keeps members coming back.
“Being small, we're well known by everybody in town. We know members by their cars when they pull in the parking lot. Before they even get out of the car we already know who's coming in,” he said. “We are on a first-name basis with members, so when we see each other at the grocery store and getting gas we say hello and talk. Our members feel very comfortable with us, and they know they can easily reach out to us and talk to the credit union.”
About the Credit Union
Lithium FCU has approximately 1,500 members, is SEG-based and serves employees of approximately 20 companies, as well as individuals sharing a single economic website. In addition, membership is open to people in nine census tracts that have been identified as underserved.
Until 2004-05, it served a single SEG, the local Lithium plant.
“In 2005 we expanded to multiple SEGs, which includes the city here, city employees. It also includes employees of a fire equipment manufacturer just down the road and several other small manufacturers in the area,” Campbell said. “Last year we applied to NCUA and were granted an underserved area expansion.”
Member loyalty is seen in the credit union’s account-per-member data.
“We are at about three accounts per member,” noted Campbell. “Some might say we achieved that since there are not that many banking options in this town. We have seen a number of banks leave this city in the last year or two. The number of banking options in rural North Carolina is dwindling.”
Previously With Second-Largest CU in U.S.
Campbell has led Lithium CU for the last six years.
“I started at State Employees Credit Union in North Carolina in 2008. I worked my way up to a loan officer by 2015,” he said. “I was looking for a way to move up, and the way things were at SECU it was somewhat difficult to do that. You can get entrenched in a position. But then I saw this small credit union had a job opening for the CEO position. I put in for it and it's been really eye opening, because when you're at a large institution you don't really have control over very much. However, here you do everything. You wear about 100 hats and you're changing them constantly throughout the day. It's quite the challenge.”
The Plusses & Minuses
Campbell said all those duties can be good and bad.
“I do like it. But it's sometimes a hassle because you're working on something and then something else pops up,” he said. “And while you're working on that something else, something else pops up and it might be a day before you even get back to your original task.”