Five Ways to Show Your Community You Care

When I came to Los Alamos in 2012, I knew that Zia Credit Union was in trouble. I was hired to lead the turnaround. We were at .04 ROA. The communities we serve were worried about the health of our credit union and our reputation had been damaged.

We were under unique pressures. We serve two small distinct communities in the beautiful mountains of Northern New Mexico: Española and Los Alamos. Los Alamos is, of course, the home of the Manhattan Project and the development of the atomic bomb. Española is a historic town with a unique culture of 40,000 residents. Growth in small towns is hard if the community itself is not expanding, and New Mexico’s economy still hasn’t rebounded from the Great Recession. 

But at Zia CU, we were able to restore our reputation, grow our loans, re-establish a healthy bottom line, and now I believe we are looked at as a community leader and partner.

Here are five things we did that made a difference to our communities. You can do them, too.

1. Honor your roots: We all know where our families come from, and our credit union families should be no different. In our case, our credit union was established by the employees of a contractor at Los Alamos National Lab, The Zia Company. Zia was responsible for maintenance and construction at the lab and employed all the skilled tradespeople. The Zia Company is gone, but we still serve that core population. We made the strategic decision that our best risk was with our loyal depositors and previous borrowers. We trained, encouraged and trusted our people to make loans. We started sending out pre-approvals for $1,000 to $4,000 signature loans to our members (including A through D credit scores) to reinforce the message that we wanted to provide them with their loans, and it would be easy to work with their credit union. The pre-approvals also kept some of our members out of the payday lending shops. Plus, members who hadn't taken loans mentioned receiving the pre-approvals long after they had gone out. We do this twice a year.
2. Manage your culture: You can stand up in front of your employees and say, “We care.” But if your HR policies are always slanted in the company’s favor, it’s hollow. You have to show them with your time-off and holiday pay policies, your healthcare, your benefits, and how you prioritize their needs in the workplace. We had to show our employees we support them in growing their careers, both within the credit union and even toward a goal outside our organization. We added a wellness program, a floating holiday, recognition awards, milestone awards, bereavement leave for non-official relationships, and an annual employee celebration dinner. We provide refreshments and lunch for staff on our busiest days of the month in the branches. We believe that our internal culture is felt by our members with each interaction.
3. Give people authority: We had to help everyone in the credit union gain confidence to do the right thing. We gave authority to front-line staff to put themselves in our member’s shoes and make corrections and/or waive fees on the spot if they feel that is the right way to resolve an issue. Our staff is elevated in our members’ eyes when they can resolve an issue right away. Our staff is responsive, and it is not a big deal for us to make things right, but it is to our members.
4. Make a difference in your community: We set aside 24 percent of our marketing budget for local donations to non-profits. We set aside a similar amount of our marketing budget for sponsorship of community events. We know that in the small towns we operate, community service is recognized.  For example, we paid the cost to resurface the basketball court and then held a grand re-opening party, including the opportunity for the neighborhood kids to play with former NBA player Alex Kirk. We established the Zia Credit Union Summer Music Fest at our community plaza to honor our public safety workers. The city and county participate with us and we had more than 1,000 people turn out to participate in 2017.
5. Support your employees’ community efforts: We’ve asked our executives and managers to serve on local community boards, and then we backed up our commitments with donations to those non-profit community organizations. I serve on the board of an economic development district, and most of our management staff set examples for employees by volunteering themselves. Our financial support of their efforts adds to their impact on those boards.

Did it work? If someone just judged us by asset growth, we didn’t go anywhere. But, we significantly improved the balance sheet. In 2012, our loan-to-share ratio was at 70 percent and going down. We were experiencing net loan runoff of over $1 million per month, finally bottoming out at 63 percent in 2014. We set strategic plans to honor and retain our core depositors and grow loans, holding our total assets in place until we could get our loan to share ratio back in line. We set a goal to get our loan portfolio to $100 million in three years. It took four. But, we’ve seen 12 to 19 percent organic growth the past couple years. We grew our core deposits in checking and savings, while allowing our more expensive certificates to go down. The results are, our loan to share ratio is now over 86 percent and our ROA went from .04 percent to 0.40 percent over the past five years, which for us is a healthy level of organic growth. 

In 2012 I probably underestimated how long it would take to change people’s minds, and to effect change in our reputation, but we did it. I didn’t come in with new ideas or try to convince people that my way was better. Credit union people know how to treat people right; we just gave them the authority to do that.

David Woodruff is CEO of $136 million Zia Credit Union, Los Alamos, N.M.

Read about another major credit union improvement effort in “She Turned the Ship.”

If you’re interested in how financials work, you might like to experience the credit union simulation that’s central to CUES School of Applied Strategic Management, April 30-May 3 in Orlando.