AmeriCU’s growth accelerates in a tough economy

ROME — “It took AmeriCU a little more than 55 years to accumulate more than $500 million in assets,” says Mark A. Pfisterer, the credit union’s president and CEO. 

“It took us a little more than five years to double that number in what can only be described as a lousy economy.”

AmeriCU began modestly in 1950 as the Griffiss Employees Credit Union, operating from a desk located in the headquarters building of the Griffiss Air Force Base serving civilian members. In 2000, the credit union changed from a federal to a state charter and rebranded itself AmeriCU Credit Union. 

“What started with an investment of $63 and 17 members has blossomed into a major financial institution with more than 107,000 members and nearly $1.3 billion in assets,” says Pfisterer. “Among the 6,429 credit unions in the U.S., only 219 have more than $1 billion in assets, which puts us in an … [elite] group. 

“Our annual revenue in 2013 topped $63 million, and today we have 285 employees. In 2013, we posted total-loan growth of 10.3 percent and a growth in deposits of 8.85 percent, both well above the national, credit-union average. [In 1950, the credit union’s real-estate was just the desk at Griffiss. In 2014, AmeriCU owns or leases 121,000 square feet in 18 financial centers. Add in 180 ATMs and 43 display terminals in an operation spread over eight counties, and you can understand just how much we have grown.” 

AmeriCU is organized into four corporations: AmeriCU, a state-chartered credit union for banking services: AmeriCU Services, LLC, which sells insurance; AmeriCU Capital Management, LLC, which sells investment products; and Hamilton Associates, Inc. which files electronic tax returns.

Corporate culture
AmeriCU Credit Union’s CEO notes a number of reasons for the rapid growth. “First, we changed the corporate culture,” says Pfisterer. “The staff was making decisions based on what was best for the organization. What we needed was a more, member-centric focus. About eight years ago, we reviewed 150-plus different processes that touched our members, and that exercise gave us a better level of understanding of member service. The decision was also made to engage members in every phase of their financial life cycle; in other words, use a 360-degree perspective. 

“It took several years and a lot of effort and training before we changed employee attitudes and our own perspectives. That’s why we no longer call our 18 locations ‘branches;’ they are ‘financial centers’ where certified personnel help our members whether they visit us for banking, investment, or insurance needs. The members recognize that we’re not here to sell them stuff; it’s not in our DNA. We’re here to help them navigate their financial life events,” he says.

Technology
Second, Pfisterer cites the use of technology. “When I arrived at the credit union in 1979 to become the controller, we were far from automated. I had to convince my boss to abandon the index cards used to record collection calls and substitute a software program. Now technology is changing at exponential rates, and it’s a real challenge to keep up. We still offer TeleLink (telephone) service where the user punches keys to complete a transaction. But most people have gone online, and the move to conduct transactions from a mobile device is … [exploding]. 

“We started installing kiosks back in 2007 to take us beyond just offering access to an ATM. We helped to create cutting-edge technology with the manufacturer that gives our members access to all of their accounts through any AmeriCU kiosk, which we affectionately dubbed Big Blue. We’re anticipating the second-generation kiosk, which should be out soon, and features video-chat-on-demand. 

“To give you an idea of just how rapidly technology is changing our operation, in 2007, 70 percent of our transactions required employee intervention. In 2013, the number flipped: 70 percent of our transactions don’t require employee intervention. In 2014, we will record 500,000 electronic transactions at Big Blue alone,” he says.

Bank strategy
Third, Pfisterer recognizes that the rush by large banks to grow by acquiring other banks and rethinking their footprint has roiled the landscape for banking customers. “Every time a bank buys another bank, the [acquired bank’s] customers become uncertain about the new relationship, offering us an opportunity to attract new members,” avers Pfisterer. “As community banks are swallowed by larger banks, credit unions are filling the gap. Then again, it seems that banks are regularly rethinking their strategies and shedding branches. This also creates uncertainty and sets up a window to attract them to AmeriCU. In 2013, our membership increased by 3,700, and this year the number of new members will exceed that of 2013. With all the changes, it’s hard for the big banks to build long-term relationships.”

Military programs
A 64-year history of military affiliation has helped AmeriCU understand the needs of its military members and to fashion programs to address their problems. “In 2013, we implemented ‘Docusign,’” Pfisterer states, “which allows our members to sign documents electronically anywhere in the world. This service has been a boon to our military, especially those stationed overseas. We also have implemented educational programs with a financial focus, such as ‘Military Saves Week,’ and we send our advisers to visit with those who are just arriving on post and those about to retire from the military to help them plan the transition.”

“AmeriCU supports the financial-fitness fairs held at Ft. Drum with a focus on budgeting, dealing with credit reports, and staying financially strong. We also have educational programs to explain payday and predatory-lending practices. For soldiers in need of immediate cash, AmeriCU has joined with the Pentagon Federal Credit Union Foundation to provide ARK loans, which allow active-duty military members an immediate, short-term loan of up to 80 percent of their next paycheck, up to $500. Fees are minimal and the … [recipient] has to agree to work with a consumer-credit counselor … Since the [government] sequester, our credit union set up a federal-employee hotline and an email help-desk to respond to questions from concerned federal employees,” Pfisterer says.

Employees
Of all the reasons for AmeriCU’s growth, the CEO credits the employees most. “The employees are the ambassadors of first impressions,” chuckles Pfisterer, who borrowed the expression from a staff member. “Everything depends on the members’ contact with the credit union. That’s why we work very hard to attract employees who are 100 percent dedicated to member service, thrive in a continuous learning environment, and who enjoy their work. [To this end] … we have created paid internships for college students to work with us on ‘real’ jobs. Our first preference is for college students who are fresh from their schooling and don’t bring any corporate baggage from a previous work experience. We have partnered with a number of area colleges and universities to hire the best of the best. Creating a great workplace environment has gone a long way to attracting and retaining an outstanding staff. I would point to our average employee tenure, which is 11.2 years when the average in the financial-services industry is just 4.7 years,” he says.

Pfisterer could also point to AmeriCU being named one of the 2014 “Best Companies to Work for in New York State” and winning first place in the Credit Union National Association “2014 Community Credit Union of the Year Award” ($250 million-plus category). AmeriCU’s selection was based on the credit union’s demonstrated success in the following areas: member impact, community impact, community-involvement practices, and financial impact. The award will be presented at a conference in November.

Challenges
Growth has not come without its challenges. “This is a very competitive business,” asserts Pfisterer. “We not only compete against other credit unions such as Empower, First Source, Summit, Visions, Northern, and GPO, but we also compete against the banks, including Berkshire, Carthage [Federal], Community [Bank], Oneida [Savings Bank], Watertown [Savings], and the larger money-center banks. What’s new is the growth of the non-traditional banking entities, which are entering the mainstream. We’re now competing against Walmart, for example, which teamed up two years ago with American Express to introduce the Bluebird pre-paid debit-card. (The Bluebird card offers access to ATMs, direct deposit, online and mobile bill-pay, and mobile check deposit — all with minimal or no monthly fees, no overdraft fees, and no balance requirements.) Then there’s PayPal, VISA, Green Dot, MasterCard, Amazon, Google, and Apple, all providing digital wallets, and now Apple Pay. (iPhone 6 and iPhone 6Plus users near a payment point in a store merely hold their finger on the iPhone’s Touch ID and a vibration and a beep tells them the transaction is complete.)”

The second big challenge is the regulatory environment. “Government rules are typically based on the one-size-fits-all concept. That means, regardless of asset size, we usually must abide by the same rules. Dodd-Frank created the CFPB (Consumer Finance Protection Bureau) which has been busy pumping out regulations. The cost to AmeriCU just this year is already $200,000 to decipher the regulations, create policies and procedures, complete software programming, and teach staff how to comply. The CFPB is now considering new regulations for mortgage lending, debit cards, mobile services, and indirect auto lending. This agency has no oversight and reports directly to the White House. I’m certain of one thing: There are more regulations coming.”

Succession
Pfisterer, at age 63, is not harboring any thoughts of retiring at this time. He acknowledges that the volunteer board of directors has had a process in place since early this year to choose a successor. The search would include both internal and external candidates. The organization’s succession process, implemented in 2009, extends to division and department heads. AmeriCU encourages individuals in the credit union with leadership potential to pursue educational training to fill any gaps in their qualifications.

The future
“There are currently 4,029 federally chartered credit unions and another 2,400 state-chartered credit unions,” observes AmeriCU’s CEO. “On average, one credit union closes or merges every business day because of the competitive and regulatory pressures and the cost of technology. AmeriCU is positioned not only to survive, but also to thrive in this environment. Over the years, our growth has come because of our focus on the members’ needs and on maintaining a fiscally sound … [institution]. Last year, we added three branches. Next year, we plan to continue our branch expansion. The future is bright for AmeriCU.”

Pfisterer bio
Pfisterer grew up in Utica and graduated in 1973 from Siena College, where he received a bachelor’s degree in economics/math. He earned an M.B.A. from the Whitman School at Syracuse University in 1977. He served on active duty in the U.S. Army from 1974-75 and continued in the Army Reserves, retiring as a colonel after 30 years of service. He assumed the role of AmeriCU’s president and CEO in 1986.  

Contact Poltenson at npoltenson@tmvbj.com