Blue skies ahead: Eastern Financial Credit Union survived the demise of its patron airline and now pursues an aggressive growth strategy in South Florida

South Florida CEO, Dec, 2004 by Richard Westlund

For the next 16 years, Eastern Financial grew by convincing businesses to offer credit union memberships to employees as a human resource benefit. Today, the credit union serves approximately 900 such organizations.

But in 2002, Eastern Financial changed its charter so it could enroll members by geographic location, opening the door for any resident of Miami-Dade, Broward, Palm Beach, Hillsborough and Pinellas counties to become a member. "We've been having a lot of success so far," says McGill, who estimates Eastern Financial has enrolled approximately 21,000 members from the community during the past two years.

Overall, Eastern Financial has around 150,000 core members--including 22,000 in the Tampa Bay area--and another 40,000 ex-Eastern employees scattered throughout Florida and the United States. But for the credit union to overcome the forces of natural attrition, and compete effectively in the marketplace, McGill wants to add 10,000 to 20,000 new members a year for the next three years--a growth rate of 5 to 10 percent.

The credit union is banking on its financial soundness to help attract new members. Approximately 11 percent of its assets are held as reserves, which is well above the minimum capital requirement of 7 percent. As a result, Coral Gables-based Bauer Rating Service has, for the past decade, given Eastern Financial its top five-star rating.

But McGill notes that those reserves will decline during the next few years to support the credit union's growth. "We are taking that capital and reinvesting in new branches and technologies," he says. "The payback will be gaining more members from the community."

While adding new members, McGill says Eastern Financial is working to enhance its member day to day interaction with the credit union and it plans to track frequency of use and customer satisfaction of its branch, telephone or online services.

Other priorities are employee satisfaction and operational efficiency, achieved in part by deploying new technology. For instance, Eastern Financial offers online and automatic teller services, and all new branches feature remote teller systems, biometrics hand scanning for secure safe deposit box area access, and a Web cafe that allows members to conduct online transactions.

"Anything you do with a live teller you can do with the remote teller system," says Mark Holmes, Eastern Financial's vice president of marketing. "The advantage is that the teller can simultaneously handle additional transactions. It really cuts down on members' wait time and improves security for our employees."

While Eastern Financial members appreciate the convenience of automated services, McGill believes there will always been a need for the personal touch. "People still want that personal relationship with their credit union," he says. "It's always going to be important to our members."

EASTERN FINANCIAL CREDIT UNION'S GROWTH

      Branches  Members

2002  18        175,000
2003  18        183,000
2004  22        193,000

Source: Company reports