Trust and Optimization During Volatile Times

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You're listening to Leaders and Lending from
Upstart, a podcast dedicated to helping consumer

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lenders grow their programs and improve their
product offerings. Each week, here,

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decision makers in the finance industry offer
insights into the future of the lending industry,

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best practices around digital transformation, and
more. Let's get into the show.

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Welcome to Leaders in Lending. I'm
your host, Jeff Keltner. This

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week's episode features my conversation with Dave
Sayers, the CFO at Main Savings Federal

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Credit Union. Dave and I discuss
how he thinks about balancing the balance sheet

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between liabilities and assets. Pretty important
topic and today's day and age with recent

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developments. We talk about the opportunity
for credit unions to be pick up deposits

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and this time of uncertainty. We
also talked a lot about how to manage

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liquidity and also while you're managing liquidity, make sure you're available to meet the

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lending needs of your members, and
also the opportunity for relationships in serving your

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members, putting their needs front and
center to really help you strengthen brand,

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loyalty and stickiness of customer relationships and
hopefully deposits over time. I think it

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was a fascinating conversation. I really
enjoyed it, and I hope you will

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also enjoy this conversation with Dave Sayers. Dave, welcome to the podcast,

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and thanks for making the time to
join us day. I really appreciate it.

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Thanks Jeff, glad to be here. I appreciate the invite. I

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start many of my podcasts by asking
my guests this question, and so I'd

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love to get your answers, like, how did you wind up in the

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banking credit union space? I don't
feel like this was the childhood ambition of

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many of my guests, and yet
yet here we say so taught me a

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little bit about your journey to where
you're at. Yeah. Sure. Came

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over to the United States from England
in nineteen eighty one and finished my college

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career here in Maine in nineteen eighty
seven, And after my freshman year in

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college, I started actually in the
banking industry. I had a job working

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in an ice cream parlor in high
school, and my mother said, no

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more of that, we need you
to work in a nice business office.

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So I applied and got fortunate enough
to get a tell a job as at

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a bank and I continued to work
at that institution through the next several years

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as it went through a number of
mergers, ended up being Fleet Bank before

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it became Bank of New England,
so I Bank of America, and then

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I progressed from there. I moved
for two or three different banking institutions.

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Had an opportunity to go in my
first senior position working up in northern Maine

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in nineteen ninety seven, and that
was kind of far from home, and

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an opportunity in a credit union world
came up actually for a president CEO,

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and my father sent me the ad
from the paper, which he never would

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usually do, and because you need
to apply to this and come home.

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So I was fortunate enough to That's
when I stepped over in two thousand into

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the credit union movement, and I've
worked I worked at that credit union for

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seven years before I came here to
Main Saving sixty years ago. So it's

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kind of I enjoy being in the
credit union space. It's kind of what

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banking was when I get into it
back in the early to mid eighties,

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when it was more community focused and
community oriented, and so I really enjoy

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being being My background on educational background
is business management, and it was just

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I really enjoyed being in an industry
where I could help people meet their financial

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goals and needs. And it's been
just a great ride, and I've been

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fortunate to have a lot of success
passed my way and had an opportunity to

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progress in the industry and really love
what I do every day because for me,

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it's all about making a difference in
people's lives, whether that's your co

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workers or your members in our case, and try to leave everything in a

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better position tomorrow than it was when
you found it today. That's a great

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story. The ad from the paper
is great. I didn't I don't know

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if that was still work. Would
that be a LinkedIn post now or something,

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you know, a glass store,
I don't know where you would they

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people it would be. But a
little slip of paper he cut it down,

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was like a two by two ad, and he cut it out and

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he put a sticky on it and
said apply for this, and then he

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just mailed it to him. He
didn't tell me he was sending it.

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And then I'm like, okay,
then I'll do what you say. And

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it worked out great. Yeah,
it worked out great. No, no

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ration, I just like we want
we want you back home. We're expanding

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our family at the time, and
it was five hours away and he's like,

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it's too fun to drive on the
weekend. So see the brand,

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kids, you need to come home. So I worked out well. So

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I'm curious how you think about right
now managing you know, we're experiencing it

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like maybe one of the most volatile
periods in banking, you know, the

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most of us have experienced. Right
there's I feel like I've got a whiplash

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from a couple of years ago.
I was getting called from going to Jeff,

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we got too much cash, help
us out with that, and then

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I, you know, that's not
the call I get anymore. If Jeff

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we don't have a lot of cash, we got to stop all of the

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stuff we're doing it it's a cash
So how do you think about how credit

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unions can optimize portfolios? Like,
how do you manage through that cycle and

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prepare yourself to be ready for what
seems to be a more turbulent set of

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times and most of us experience of
the last number of decades where there was

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I would say a little bit more
stability than what we've seen that the rapidity

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of chain seems to have really increased. Yeah, I mean, it's it's

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a great question. And as I
as I think about that, UM,

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it's been as you mentioned, it's
been a number of years since we find

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ourselves in a situation like we do
today. UM. And in many cases,

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perhaps folks that haven't been in the
industry more than fifteen or twenty years

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have never experienced first time around.
Yeah. So yeah, and that makes

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it even hotter because you don't have
that experience, you know, to draw

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on. UM. One of the
things that that that we try to do

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UM is trying to create symmetry throughout
our balance sheet. Obviously, we know

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that you're going to have to be
mismatched somewhere along the way. You're either

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going to be asset a liability sensitive. You need the opportunity to, you

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know, to leverage that and make
money. Certainly, you know, two

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years ago, I think we would
have been hard pressed to find anyone in

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the CFO roll across the industry that
would have predicted that rates would have gone

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up close to five hundred basis points
inside of fifteen months. And so being

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able to anticipate that and prepare for
that is kind of difficult, but what

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we've tried to do. What we've
tried to do is balance across the assets

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and liabilities as best we can.
Our philosophy has always been to try to

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match assets and liabilities to the extent
that we can. There was going to

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be a little bit mismatched, but
take those liabilities and put them into somewhat

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like assets or something that would be
amnicant when it comes to risk, right,

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we don't speculate on what could happen
tomorrow. We try to make decisions

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today they're in the best interests of
the institution and our members based on what

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the circumstances are today. And I
think, you know, when we look

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at some of the issues that have
gone on here recently, and obviously SPB

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is on top of everyone's mind when
you look at what the issues were there,

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and there's obviously a lot more to
the story than what I'm privy too

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or what most people have privy two. But the bottom line was they took

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low cost short term assets or no
cost short term I'm sorry liabilities, and

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they tried to um, you know, leverage the spread and buy long term,

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high yielding assets. And then when
the markets turned to a degree that

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another of us could have predicted.
Now they're in a situation where in order

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to meet that demand, they can't
afford to race the deposit rates. So

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they're going to meet that demand for
deposit outflows because they're borrowers are looking for

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higher returns. You've got to liquidate
your assets, and now you're doing them

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at substantial loss. So we try
to be obviously you give up a little,

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you don't. You don't want to
chase yield. We don't. We

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want to obviously earn as much as
we can on our excess funds and our

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investments, but we feel it's appropriate
to maintain a balance there that makes sense

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so that you don't run into that
situation. You might in the short run,

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you're gonna make it a little bit
less money, but you're going to

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take the whole bunch of risk off
the table as well. How do you

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think about you talk about buying like
assets to the liability matching durations and things

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like that, and one of the
questions I have is is how you think

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about the duration of deposits of various
types shifting. Because one of the big

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surprises to me, I think for
everyone in the SVB was just how fast

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deposits, like how correlated the outflow
of deposits could be and based all like

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twenty five percent of deposits outflow in
a day, and I don't think many

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of us are prepared for that,
And I think we thought of them as

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stickier, And so I'm curious how
you think about the shifting nature of like

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what what is the nature of the
duration of a deposit? How sticky is

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that? Is that shifting in your
mind? And how do you adjust that?

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Because it feels like there was a
bit of poor risk management there,

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for sure, in terms of you
know, buying long term treasuries at one

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seven or whatever, like it was
not a good play. Interest rates were

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certainly not going down and you were
giving yourself big interest rate risk. But

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there was also a degree of like
traditional run on the bank, and just

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the speed of which it could happen
was kind of unprecedented and left them really

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in a way that given you know, six months, they probably could have

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handled this in some better way,
but given twenty four hours, there was

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nothing that could be done for them. And I think that changes the way

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we have to think about what what
what what a deposit looks like and what

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it means and how long term it
might be when we're trying to match it

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to an asset. No, that's
a that's absolutely right, and it's a

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it's an excellent question. And certainly
nobody could have predicted that they would have

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the run that they had in such
a short period of time. Um,

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you know, and we run obviously, as I would assume most people do

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with up to our ALM modeling.
We run all kinds of what if scenarios,

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and honestly, for a number of
years, myself and others have asked

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the question, you know, how
realistic is it that we're going to see

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rates change three or four hundred basis
points overnight and we're going to have a

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run, and we're going to lose
ten and twenty percent amount of deposits in

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you know, thirty sixty ninety days. And it's easy, like I mentioned

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previously, when people haven't gone through
these cycles before, it's easy to say,

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Hi, that's not going to happen. But if we look back now

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over the history of the last fifteen
months, it did happen. And then

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so and one of the things I
am always cautioning our alcoholon is the fact

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that hey, we do a three
or four hundred basis point shock test.

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Well, when I do that today, it's the equivalent of doing an eight

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hundred basis point shock test fifteen months
ago, because races move five hundred and

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now you're shunk in an additional three
and you know, how how are you

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going to look there? So we
obviously do what most people do. We

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do to decay studies, you know, on our deposits, and we try

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to look at how they've performed,
not only over time, but during various

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economic cycles and those kinds of things. And hopefully what's happened in this kind

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of a situation before has been somewhat
predictive of what might might happen in the

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future. But I think a lot
of it boils down to the trust that

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you build with the with the members
that you have, and I actually think

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that this could provide. Of course, time's going to tell whether this theory

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proves true or not, but I
honestly think that we might have a little

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bit of a you know, we
might have a little bit of a flight

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to safety here. And I think
that credit unions in general may be picking

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up deposits as we move forward over
the next several months just because now,

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I mean, all all financial institutions
are stained by what's going on with the

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recent losses, right, because we're
all painted with the same brush. But

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I honestly believe as well that just
like when the stock market ebbs and flows,

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is there can be a flight to
safety when the stock markets going down

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across the financial industry. I think
this could be something that pushes members or

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consumers and pushes deposits towards credit unions. So that could be something that alleviates

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what is currently a liquidity situation going
on for most But it's hard. It's

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hard to figure out. You know. It's easy to have have the glass

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ball now and say, well,
we know what's going to happen, right,

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I mean, and I've said to
other members of our staff and to

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our board that you know, had
I known in January of last year what

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would happen with rates, I probably
would have gone out and borrowed a whole

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bunch of money and locked in those
one percent rates for four or five years,

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and we'd be looking us Treasury right, We'll be looking fantastic. But

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the problem over that at the time
was if I go out and I buy

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these investments, or borrow this money
and I'm paying one or two percent,

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I'm earning zero overnight. That's a
huge risk. You know, I'm going

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to pay that. I'm going to
pay for that, and then if rates

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don't change, now I'm a little
bit of a chump. So that goes

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back to you know, my comment
before that we really feel we need to

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make the right decisions every day based
on what's going on in the economy today.

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Not necessarily. We certainly want to
look ahead and predict, try to

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predict as much as we can what
we think could happen in the future.

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But I don't think we can bet
our future on the fact that that is

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going to happen, because it may
not. How do you think about You

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talked about the possibility of cs picking
up deposits in this kind of flight to

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safety. What's your advice for a
credit union a community bang? I mean,

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I want I want limited to credit
unity of people who listen to both.

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But like if you want to look
like in some ways, I feel

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like the safety feels like the Big
Four, right, you go, Well,

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these guys are almost for sure going
to pick up a government guarantee of

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deposits, maybe even uninsured. In
the case that they're systemically important, they

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kind of almost an implicit unlimited FDIC
insurance against those guys, and so that

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feels like the natural form of safe
But I think you could be honest,

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something that smaller institutions can feel like
a safe bet as well for a lot

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of businesses and consumers. What's your
advice on how to how to feel like

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that safe place in a storm if
you're not one of the big four with

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this kind of you know, sifty
indication that the government's really going to make

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sure that nobody working with you gets
hurt in the end. That's a great

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question. I think you know,
we we over in our market have worked

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very diligently to develop a strong brand
and become seen as a trustworthy institution.

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I think transparency is important. Whenever
we have the opportunity, whether it be

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through social media or print media,
you know, annual meetings, whatever it

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may be, newsletters, we try
to be as transparent as we can and

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put the message out to the member, always trying to educate them on what's

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going on in the industry, how
that impacts us, how we've positioned,

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what our philosophy might be in terms
of how we handle you know, certain

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situations, and obviously in this case
with liquidity being on everybody's mind right now,

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you know, we tend to be
as proactive as we can and get

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the message out that in a positive
way, not just promoting ourselves by promoting

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the industry in general. Here's questions
that you need to be able to ask.

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Here is things that you can do
to protect yourself and kind of be

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an educational front, if you will, for those folks that have questions,

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and certainly we've had members over the
last several weeks that of with questions we

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have you know, a good portion
probably not a substantial amount, but probably

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ten percent of our memo deposits eight
to ten percent of our memo deposits would

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be considered uninsured deposits. And so
a few folks have had some concerns.

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We have looked at how we can
add access share insurance, and in some

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cases for certain programs we've done that. We also educate the members whenever we

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have the opportunity on how you can
structure your accounts so that you can get

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more out of the FDIC or NCUA
insurance, which possible to get substantially more

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than the you know, the base
two hundred and fifty thousand, the AFU

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struct your accounts in the right way. Yeah, so it's really it's really

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about education and we just try to
Like I say, we've got a really

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good reputation. We've been in the
market since nineteen sixty one and we've always

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remained profitable, We've remained strong,
and I think that the members know that

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they can trust us when they have
questions, We're willing to answer those questions

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completely. I'm a full transparency so
you know, I think that that helps.

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Like I say, there's always whenever
there's whenever there's bad news, it

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kind of it kind of impacts everyone, right, if there's positive news in

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the industry, it kind of falls
on deafe as most of the time.

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Well, it's a bit like the
like the intelligence agencies, right, like

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when you're managing it, well,
nobody, nobody's paying attention until something goes

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wrong. And I thought this is
one of the most ludicrous lines of reasoning

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after SVB was like that the line
of defense was supposed to be the CFOs

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of the businesses that we're banking with. These guys looking at the balance sheet

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to make sure they were putting their
deposits at a bank that wasn't taking risky

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bets, and I want, I
don't think when things are normal, the

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CFO of very many businesses is looking
at the balance sheet allocation and that you

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know, is there interest rate risk
at the you know, in the investments

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that my bank is making, and
should I move my deposits because of that?

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I thought that was kind of silly
because your point like people aren't really

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paying attention, but maybe at this
moment being a bit more of a dull

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and traditional I mean dulls maybe the
wrong word, but you talked about the

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credit union space being the kind of
back to basics version of banking. The

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community banking was that it might be
a strength when times get turbulent that you're

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sticking to, you know, not
trying to make an excess yield and you're

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doing the basic banking stuff that is
a little more stable through thick and then,

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Yeah, I honestly believe that That's
why I talk about, you know,

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the flight to safety. The unfortunate
reality that I think we all know

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is that there's whatever something bad happens
in the world, no matter what it

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is, is always a massive overreaction
right, and so the concern that we

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have is from a regulatory standpoint that
and rightfully so the regulators should be focusing

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on these things. But what will
typically happen now is there'll be a massive

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overreaction. They'll want to see even
more what if analysis and stress testing through

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the ALM model bank I don't want
to see obviously, you know, less

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risk and it's just going to be
on and on and on. So even

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though you have a long an institution
may have a long track record of performing

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in an extremely safe and sound manner
with great controls and practices, and is

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doing everything the way that they should
to continue to be successful, there's really

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no leeway going to be given.
There still going to be we get treated

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with the same brush as everyone else. You know, this went wrong over

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here, so we assume that it's
going to go wrong with you, and

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so therefore we're going to be even
more We're going to put even more of

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a regulatory burden on you. And
that's that's difficult because with everything that we're

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dealing with, I mean, it's
appropriate that they should have the right controls

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in place and we should operate within
that framework. But I think a real

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concern for us and others, is
that now we're going to go away,

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you know, the other way.
Should this have happened at SPB, probably

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not, And the fact that they
had, you know, there's a certain

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amount of blame that can not only
be placed on the management there, but

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also the regulators to a large degree. They're in the shop on a regular

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basis and they see what's going on, and it's easier to be a Monday

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morning quarterback, right look back.
Hopefully that was a bad decision. We

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shouldn't have done that. Everybody makes
mistakes, so that's a little bit of

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a concern for us. We you
know, we have a great relationship with

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our regulator. We've always been We've
always been considered strong and safe and sound,

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and that will continue to be the
case. But I know that there's

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going to be even more reverted in
those areas and that kind of takes away

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from what we can do for our
membership in terms of it takes time,

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it takes money, it takes effort, and that takes money and time away

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from what we can do to assist
on members with the programs that they want

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to have. So let me ask
you a related question, which is into

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something you said earlier, which is
kind of just like liquidity crunch that people

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are experiencing. And you know,
when you talk about the back to basics,

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it's really about I find so much
of credit and is one of the

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things I enjoy is it's really about
serving the members. I mean, there's

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not this kind of asset purchase yield
seeking the little bit more like how do

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we use our deposits to serve the
products that are that our members needs are

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truly kind of like balancing the two. But obviously the needs of the of

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the of your member base can be
shifting in a different way than your deposit

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base may be. So how do
you think about managing you know that serving

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the needs of the members in terms
of products and lending things, you know

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of services they may need with the
liquidity situation, is it is it is

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a little bit more volatile because it
feels like those two things can get can

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get out of balance and you're trying
to really serve both. Yeah, that's

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absolutely right. I think you know, the last few years, so you

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say three three and a half years
now pre COVID to today, um our

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industry has been through really an unprecedented
time. UM what we found doing COVID

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was that we had this massive influx
of cash and liquidity. And I think

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that's probably true from those institutions.
Um you had the PPP going on and

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all of the government assistance programs that
were out there, and people were receiving

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all this funding. Businesses, we're
receiving large amounts of funding, and obviously

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that that's stopping you know, at
the at their local institution. So we

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saw liquidity. We saw a record
high liquidity during during the front part of

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COVID, and the assumption was that
that's going to be temporary. This money

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is going to be spent down and
it's going to go away, So we

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wanted to make sure that we continue
to keep those funds available so that it

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could it could flow out as easy
as it came in. It turned out

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that that really wasn't the case for
the most part. I'm sure some of

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that money flowed out, but because
of the growth that we're going through and

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attracting and acquiring new members, we
really didn't see our balances roll off.

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We ended twenty twenty one with you
know, an excess of five an excess

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of one hundred million dollars in cash
and at the time, we were under

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five hundred million in assets, so
that was, you know, fly substantial

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and we're earning zero on that money. So we put together a plan.

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We said, you know, we
know members are going to need there's going

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to be we moved through this COVID, we know there's going to be a

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demand, and members are going to
want to get out, they want to

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spend money, they want to buy
cars that they may want to do with

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interest rates being as low as they
are, and we're in zero on that

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money. So let's get aggressive on
loan growth and we put together some really

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aggressive loan growth programs. For twenty
twenty two, I think we budgeted to

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grow loans about eighty million dollars.
We actually end up growing loans about one

335
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hundred and ten million. Wow.
And we were still bringing in cash,

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so obviously our cash bondances were going
down. And then the ALM model suggesting,

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hey, you know, you can't
continue to grow loans at this pace

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obviously for you, and we weren't
bringing in deposits at that pace. We

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only bring into posits maybe at half
of that speed, which was by design.

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But then rates start to go up
right so throughout the year we're getting

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this money out there, but then
we're getting to a pointless like, we

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don't want to be too aggressive on
pricing now because you can actually hear an

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equal two or more than what you
were pricing some of these loans at,

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and so you leave it in cash, and you don't, you know,

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you don't want to take the risk
by going towards the fourth quarter of last

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year. I looked into this situation
and said, you know, we want

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to prepare ourselves for continuing to grow
in twenty twenty three, and we need

348
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to replenish some cash. So we
actually got really aggressive and we went out

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there with some very attractive certificate special
offers. At the time, we were

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up in a fifty year five percent
CD which was I was told it was

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the highest rate in the nation at
the time. Whether that's true or not,

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we're not sure, but it was
certainly very attractive in the marketplace.

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We knew we would bring in a
substantial amount of cash. We knew that

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we would cannibalize some of our own
deposits that have been sitting on the sideline

355
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in low cost deposits, waiting for
rates to go up. But we were

356
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willing to do that because a couple
of things, I knew that I could

357
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go out and buy institutional investments at
or above that rate four terms twelve to

358
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eighteen months, and we were happy
to do that. And then it worst

359
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case scenario, we're earning somewhere around
four point six at the time overnight,

360
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so we're only given up maybe forty
basis points on the spread. And the

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flip side to that was we said, this gives us an opportunity to bring

362
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in new members, and it gives
us fifty months to cross sell these new

363
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members and make us that primary financial
institution. So part of our strategic plan

364
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to grow and you can continue to
grow in twenty three was exactly that we

365
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backed off of our loan growth goals. We focus on deposit acquisition, and

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we said we're going to put together
a plan that now allows us to deepen

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the relationship with these members. Our
history has shown that typically we're very successful

368
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doing that. When we run certificate
specials, we always bring in hot money.

369
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Certainly some of that leaves when the
certificates mature, but we've never seen

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our balances go backwards, so we've
always been able to place that hot money

371
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as we bring in these members and
deep in the relationship. So that kind

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was our strategy. I was obviously
concerned as a person that's responsible for running

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the ALM model and making sure we
have adequate liquidity and knowing what was going

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on in the industry, and I
said, let's just get out ahead of

375
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this as quickly as we can.
Let's try to bring in a bunch of

376
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money in our market. I think
we did really well. I mean,

377
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we brought in you know, forty
or fifty million dollars in new money in

378
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three or four month periods, So
that was that was huge for us.

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And now we're well positioned again.
We've got a ton of money in our

380
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overnight account, we've got strong loan
growth continuing way over budgets to find the

381
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first quarter. But it positions us
well to operate from a you know,

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we position to operate from a strong
a strong foundation and continue to be able

383
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to offer what we need to to
our members. We may make a little

384
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bit less money because we've taken on
that extra expense, and certainly with the

385
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we did have more money transition over
from the non low interest accounts into the

386
00:25:34.480 --> 00:25:40.119
c That's okay because now that money
is sticky and with loan rates continue to

387
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increase, we can we can still
make a positive spread there and leverage the

388
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volume to still generate some money on
the bottom line. Obviously, we've got

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to continues a fourth the capital ratio
as we do that. Hine, I'm

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00:25:52.799 --> 00:25:59.519
Margie Clerk, President and CEO of
Agriculture Federal Credit Union in Washington, DC.

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When we wanted to acquire more members
of personal loans, we knew we

392
00:26:03.240 --> 00:26:08.079
needed a partner that allowed us to
scale quickly and easily. With Upstart,

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00:26:08.119 --> 00:26:12.440
we were able to go live in
fifty four days without adding hoodcom, and

394
00:26:12.519 --> 00:26:18.480
we were able to learn previously under
serve our hours with Upstart's model. If

395
00:26:18.519 --> 00:26:22.920
you'd like to learn more about our
partnership with Upstart, you can read more

396
00:26:22.960 --> 00:26:27.000
at upstart dot com. Forward slash
Lenders, Thank you, and back to

397
00:26:27.079 --> 00:26:33.880
the show. You know, in
times of volatility were times, you know,

398
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I feel like so often in times
of difficulty, there's like hidden opportunity,

399
00:26:37.759 --> 00:26:41.359
right. It's kind of a moment
where what's the old buffet saying,

400
00:26:41.480 --> 00:26:42.960
and everybody else is nervous, get
greedy, whenverybody else is greedy, get

401
00:26:42.960 --> 00:26:45.720
nervous. So a lot of people
are nervous and I'm not trying to say

402
00:26:45.799 --> 00:26:48.799
you want to be greedy, but
what do you think the hidden opportunities are?

403
00:26:48.880 --> 00:26:51.279
Like, what are the things you're
saying, Hey, this is a

404
00:26:51.319 --> 00:26:55.720
real moment that we can take advantage
of in certain ways while we're obviously being

405
00:26:55.960 --> 00:26:59.319
cautious and conservative in others. What
are the kind of hidden opportunities in the

406
00:26:59.319 --> 00:27:02.559
current environment. Well, I totally
agree with that, and I think over

407
00:27:02.839 --> 00:27:06.519
certainly over the last ten or twelve
years, that's kind of been our m

408
00:27:06.559 --> 00:27:08.200
O, if you will, is
we look at, you know, what's

409
00:27:08.200 --> 00:27:11.920
going to be coming down the road
over the next twelve to eighteen months,

410
00:27:11.920 --> 00:27:14.519
and how can we take advantage of
that, and there's going to be Our

411
00:27:14.559 --> 00:27:18.599
history would show that there's times when
long growth is there to be taken and

412
00:27:18.599 --> 00:27:22.440
we've gotten aggressive in that way.
Other times when it's like, Okay,

413
00:27:22.480 --> 00:27:25.920
we need to back off on that. Loans are going to be relatively flatten

414
00:27:25.920 --> 00:27:29.319
out for the next whatever twelve months, and we're going to focus on the

415
00:27:29.359 --> 00:27:34.599
deposit acquisition. So the opportunity I
think goes back to as those as rates

416
00:27:34.599 --> 00:27:38.039
have ebbed and flowed and liquidity ebbs
and flows. We try to tie our

417
00:27:38.079 --> 00:27:42.400
strategy to what's going on and what
opportunities does that create. So when we

418
00:27:42.519 --> 00:27:47.720
flush with cash and overnight rates are
relatively low, we came out with a

419
00:27:47.880 --> 00:27:52.960
very aggressive We had a fifty percent
off promotion where we've basically said, anything

420
00:27:53.000 --> 00:27:57.319
that's non real estate related that you
hold elsewhere for debt, you come see

421
00:27:57.400 --> 00:28:03.759
us and we will cut your rate
in half. And certainly that led to

422
00:28:03.880 --> 00:28:08.720
us writing some loans at rates that
were slightly below um where our traditional rates

423
00:28:08.759 --> 00:28:12.640
would have been. But now,
you know, to folks out there that

424
00:28:12.640 --> 00:28:15.759
are consuming financial products, they say, wait a minute, I can cut

425
00:28:15.759 --> 00:28:21.799
my rate in half. That was
very attractive and very successful, and we

426
00:28:21.799 --> 00:28:25.279
we ran that promotion for you know, three or four years. It's a

427
00:28:25.319 --> 00:28:27.599
little harder to do it now.
We're still kind of trying to figure out.

428
00:28:27.680 --> 00:28:32.920
And obviously credit cards is a perfect
scenario. You know, I operate

429
00:28:32.960 --> 00:28:37.880
on a credit card is ten percent
basically nine point nine nine percent, which

430
00:28:37.960 --> 00:28:41.599
is already fifty percent off of what
more than fifty percent off of what folks

431
00:28:41.599 --> 00:28:45.119
are probably paying if there's some of
the large YEA with the typical rates here

432
00:28:45.279 --> 00:28:51.799
twenty we've tried to lage that a
little bit, and then obviously as things

433
00:28:52.319 --> 00:28:55.519
as things EMPs and flow. We
will come out with some deposit specials that

434
00:28:55.559 --> 00:28:59.519
make sense. But in both cases, whether we're attracting loans, we say,

435
00:28:59.599 --> 00:29:00.559
okay, we want to bring your
loans in and then we're going to

436
00:29:00.640 --> 00:29:03.720
work on you. While we've got
your loans in here, we're going to

437
00:29:03.759 --> 00:29:07.480
work on explain it to you and
selling to you why our other financial products

438
00:29:07.480 --> 00:29:11.480
and services make sense. Right,
and I think like most credit unions,

439
00:29:11.480 --> 00:29:14.920
we don't charge any fees. You've
got full service. Everything that you need

440
00:29:14.960 --> 00:29:17.440
to consume, you can consume here
and you're not going to pay the fee.

441
00:29:17.519 --> 00:29:21.279
So if we're bringing in new loans
members through new loans, and we're

442
00:29:21.279 --> 00:29:23.480
going to focus on how would we
now become your PFI on the deposit sign

443
00:29:23.640 --> 00:29:27.440
and provide on these other services.
And then now while we're bringing in the

444
00:29:27.480 --> 00:29:32.279
folks on with higher deposit rates,
Now that gives us a period of time

445
00:29:32.319 --> 00:29:36.880
to say, let's let us we
want to sell ourselves to you and explain

446
00:29:36.960 --> 00:29:40.640
why we should be your primary financial
institution, and this is what we believe

447
00:29:40.680 --> 00:29:42.359
in, this is what we care
about. We want we really care about

448
00:29:42.359 --> 00:29:45.480
your financial well being. And then
the other piece of that which I think

449
00:29:45.519 --> 00:29:51.519
is really important and I think most
small financial institutions would take this tact is

450
00:29:52.200 --> 00:29:55.480
we don't want to sell you anything
that you don't need. It's not about,

451
00:29:55.519 --> 00:29:57.799
you know, how many widgets did
we sell today, It's about how

452
00:29:57.799 --> 00:30:02.880
many members did we ass how many
members lives did we make better tomorrow?

453
00:30:03.119 --> 00:30:06.160
Did they go today as a results
of what we're able to do for them.

454
00:30:06.759 --> 00:30:08.759
So it kind of amps and flows
based on what's going on in the

455
00:30:08.799 --> 00:30:15.079
economy and what our most important initiatives
are. But that's kind of we're always

456
00:30:15.119 --> 00:30:18.759
looking about how do we deepen the
relationship? How do you think about I

457
00:30:18.799 --> 00:30:22.799
want to dig in on that because
I think it's such a such an important

458
00:30:22.839 --> 00:30:26.119
point, this difference between how many
products did we sell? How many you

459
00:30:26.119 --> 00:30:30.720
know, and did we find the
right products and serve the members needs?

460
00:30:32.039 --> 00:30:36.480
And how do you think about creating
a culture and measuring that because it's so

461
00:30:36.559 --> 00:30:38.759
often what the old managers saying,
whatever is measured is what matters, And

462
00:30:38.799 --> 00:30:42.160
what's measured is typically like unit sales, you know, like it's the thing

463
00:30:42.200 --> 00:30:45.880
it's easy to do, and like
was that the right thing for the customer?

464
00:30:45.160 --> 00:30:48.960
It's harder to measure like did we
really serve the customers needs? So

465
00:30:49.000 --> 00:30:53.799
I'm curious how you think about both
either putting measurements on that or at least

466
00:30:53.799 --> 00:31:00.599
instilling that understanding and culture into your
team members, especially as out there maybe

467
00:31:00.640 --> 00:31:03.880
with complants that are against sales targets
or other things. You go, how

468
00:31:03.920 --> 00:31:07.359
do we really get people to focus
on serving the members needs above hitting some

469
00:31:07.400 --> 00:31:11.160
target or growth, because that feels
like the right thing to do, but

470
00:31:11.240 --> 00:31:15.359
also a hard thing to get the
organization centered around doing. Just from an

471
00:31:15.400 --> 00:31:22.039
incentives point of view, Yeah,
absolutely, it's it's extremely difficult one of

472
00:31:22.039 --> 00:31:23.839
the things, and we're moving,
you know, we're moving down that road

473
00:31:23.880 --> 00:31:26.279
all the time to say, how
can we do that better? We've had

474
00:31:26.559 --> 00:31:30.960
we've kind of moved away from incentives
over the last few years. There's a

475
00:31:30.960 --> 00:31:34.599
couple of products that we will still
incent you know, our loan offices and

476
00:31:36.440 --> 00:31:40.440
MSIs to sell to the members,
and still we attach products and those kinds

477
00:31:40.480 --> 00:31:45.400
of things. But when it comes
to goals and objectives, we've tried to

478
00:31:45.480 --> 00:31:51.119
steer away from giving somebody a hog
goal. You know, we know what

479
00:31:51.200 --> 00:31:53.759
the expectations are. We explain to
all of the stuff their introduction roles.

480
00:31:55.319 --> 00:31:59.200
This is what we would hope for
this position, that we can can generate

481
00:31:59.240 --> 00:32:04.759
for volume, but we don't focus
on really we give feedback. Obviously,

482
00:32:04.839 --> 00:32:07.440
we let everybody know what the production, how we do them for production,

483
00:32:07.480 --> 00:32:09.119
and what the numbers are, but
we don't focus on, hey, you

484
00:32:09.160 --> 00:32:13.559
know, how come he didn't sell
this many loans last week or he didn't

485
00:32:13.559 --> 00:32:16.440
bring in to that many deposits.
Now we're transitioning. We've actually gone to

486
00:32:17.839 --> 00:32:24.759
we're actually going to a key performance
indicator type system if you will, or

487
00:32:24.880 --> 00:32:29.720
mentality that we're introducing across the company
now, and we're saying, these are

488
00:32:29.720 --> 00:32:31.519
the things that are most important to
us, and this is going to determine

489
00:32:32.480 --> 00:32:37.880
you know, potential bonus payouts or
number of different things on the incentive site.

490
00:32:37.880 --> 00:32:40.640
So rather than saying we're going to
give you five dollars for every checking

491
00:32:40.680 --> 00:32:45.759
account that you open or whatever it
might be, we're saying two things that

492
00:32:45.279 --> 00:32:51.480
the two we came up with only
two KPIs this year. One was the

493
00:32:51.519 --> 00:32:55.319
most important. One is we want
the member feedback. So after a member

494
00:32:55.319 --> 00:32:59.640
of transaction occurs, could be a
new member, it could be an existing

495
00:32:59.640 --> 00:33:04.119
member. After certain transactions, the
member would receive a survey from us,

496
00:33:04.119 --> 00:33:07.839
It says, tell us, how
we did you know? How well did

497
00:33:07.880 --> 00:33:12.240
you feel that you were served?
And they were able to rate us on

498
00:33:12.319 --> 00:33:15.039
that. So that's one. The
other component, because we want to tie

499
00:33:15.079 --> 00:33:19.759
this in across the entire company,
is we have an internal component for that.

500
00:33:19.960 --> 00:33:23.000
How well were you served by a
coworker? How well was the folks

501
00:33:23.039 --> 00:33:27.799
on the front line served by the
backshop department when they needed to be in

502
00:33:27.839 --> 00:33:31.200
those kinds of things. And so
we're using those right now as measures,

503
00:33:31.200 --> 00:33:37.839
and we honestly believe that that kind
of feedback will make us better. We

504
00:33:37.839 --> 00:33:44.119
want to enhance the member experience internally
and externally. And if we do that

505
00:33:44.400 --> 00:33:47.480
and we become known. We have
a strong presence now and I think our

506
00:33:47.480 --> 00:33:52.319
members rate us highly in terms of
the service. But we're trying to say,

507
00:33:52.359 --> 00:33:53.759
how can we be better, How
can we better tomorrow than we were

508
00:33:53.799 --> 00:33:59.440
today, and how can we make
that a positive experience for you? So

509
00:33:59.480 --> 00:34:05.400
with that feedback, we're able to
address maybe we have issues where our process

510
00:34:05.519 --> 00:34:07.800
is not as member friendly as we
think it might be, and we'll be

511
00:34:07.800 --> 00:34:14.079
able to assess what's the difference between
what we feel is important to the member

512
00:34:14.119 --> 00:34:16.519
and what is really important to remember, and then we can adjust our processes

513
00:34:16.559 --> 00:34:21.679
accordingly, so we still have the
appropriate controls in place, but we're able

514
00:34:21.679 --> 00:34:23.480
to now push it back to the
member and give you the experience. So

515
00:34:23.559 --> 00:34:28.000
you leave and you say, wow, that was fantastic, And not only

516
00:34:28.000 --> 00:34:30.239
do you want to bring all the
rest of your business to us because we

517
00:34:30.280 --> 00:34:31.239
treat you so well, but now
you're going to go out and tell all

518
00:34:31.239 --> 00:34:35.159
your friends how you really need to
go and see main savings because this is

519
00:34:35.159 --> 00:34:37.599
what they're going to do for you. So we're trying to get away from

520
00:34:38.000 --> 00:34:43.440
the whole stigma. If you will, you need to sell x amount of

521
00:34:43.639 --> 00:34:46.840
whatever it might be. From a
pricing standpoint and a product standpoint, I

522
00:34:46.880 --> 00:34:52.159
think we structure ourselves in such a
way that those things are easy to sell

523
00:34:52.480 --> 00:34:55.679
and they're attractive to buy. And
like I say, we don't challenge fees.

524
00:34:57.920 --> 00:35:00.400
You know, use and abuse fees
is really all we have for fee

525
00:35:00.400 --> 00:35:04.840
income, the biggest one being overdroffed
obviously, which is really the only punitive

526
00:35:04.880 --> 00:35:07.679
fee that we have on members.
All of our account services are free.

527
00:35:07.679 --> 00:35:12.360
And then obviously on the use side, we're generating a fair amount of interchange

528
00:35:12.400 --> 00:35:15.320
income which is important. It doesn't
it's free to the member obviously, but

529
00:35:15.519 --> 00:35:19.960
it's obviously makes a big difference on
our bottom line. And we're working on

530
00:35:20.320 --> 00:35:23.760
how can we enhance other revenue sources
so that we can potentially, we see

531
00:35:23.760 --> 00:35:30.039
the writing on the wall, reduce
and eliminate what revenues coming in for overdrafts.

532
00:35:30.039 --> 00:35:35.159
So we're trying to look at options
for how we can potentially provide some

533
00:35:35.199 --> 00:35:37.760
additional services that members may even be
willing to pay for if we're not regrowing

534
00:35:37.800 --> 00:35:42.760
them to pay. But there's some
additional psychic subscription service that you can just

535
00:35:42.920 --> 00:35:47.719
like the TV stations and everyone are
doing now pay for nine nine a month.

536
00:35:47.800 --> 00:35:51.039
You can have all of these benefits. If they're important to you and

537
00:35:51.079 --> 00:35:52.639
they have value to you, maybe
you'll subscribe to those type of things.

538
00:35:52.679 --> 00:36:00.400
So that's kind of the approach we're
taking. And we have established, you

539
00:36:00.440 --> 00:36:05.079
know, what we call Main Savings
Academy, so we all of the folks.

540
00:36:05.079 --> 00:36:07.559
We want to create career paths for
everybody, regardless of what level in

541
00:36:07.559 --> 00:36:10.760
the company the rest so they feel
this opportunity to grow and expand. So

542
00:36:10.800 --> 00:36:15.079
there's a required academy classes for people
to continue to progress in that career.

543
00:36:15.159 --> 00:36:19.960
There's optional classes that go along with
that. It's all about educating them so

544
00:36:20.000 --> 00:36:23.639
that they understand all of the intricacies
of our business as best they can.

545
00:36:23.679 --> 00:36:28.840
The better that they understand how everything
fits together and how a vital they are

546
00:36:28.920 --> 00:36:31.800
to our success, the better job
they can do. So it's more about

547
00:36:31.840 --> 00:36:37.800
empowering them and educating them and supporting
them and providing them with the tools that

548
00:36:37.840 --> 00:36:42.679
they need to be successful, and
then having a system to say, this

549
00:36:42.760 --> 00:36:44.880
is the feedback we're going to get. Your members are the ones that are

550
00:36:44.920 --> 00:36:47.960
going to tell us how well we're
doing, and that's going to determine what

551
00:36:49.480 --> 00:36:52.639
we may have available for incentive,
for example, so getting away, because

552
00:36:52.639 --> 00:36:57.239
we know that if we do those
things right, then the business will come.

553
00:36:57.400 --> 00:37:00.639
All of the business that people want
to consume will come to us.

554
00:37:00.679 --> 00:37:04.360
And it's not about just selling something
that they don't need, because eventually they

555
00:37:04.480 --> 00:37:07.719
learn, they learn to dislike you
for that. That becomes a dis instant

556
00:37:07.840 --> 00:37:09.039
for them want to come into do
any of any business with you, because

557
00:37:09.039 --> 00:37:12.239
like every time I go in there, they knock me over the head and

558
00:37:12.239 --> 00:37:15.719
they're trying to give me this stuff
that I just don't need. So really

559
00:37:15.800 --> 00:37:17.840
understanding what their needs are and trying
to find a way to delivery thing to

560
00:37:17.840 --> 00:37:21.119
them. It's kind of the way
we go about there. Love it.

561
00:37:21.280 --> 00:37:23.519
That's great advice because it's such an
important thing to be able to do such

562
00:37:23.559 --> 00:37:29.079
a get the organization to really execute
on David, I got three questions I

563
00:37:29.119 --> 00:37:31.719
ask everybody at the end of this
podcast. I'd love to ask them to

564
00:37:31.760 --> 00:37:36.119
you now because I think we're about
that out of time. And they go

565
00:37:36.199 --> 00:37:37.840
like this, Number one, what's
the best piece of career advice you've ever

566
00:37:37.840 --> 00:37:43.320
gotten? Well, certainly I think
the best. The best advice that I

567
00:37:43.400 --> 00:37:47.960
try to give to the folks that
I work with is to be honest always,

568
00:37:50.039 --> 00:37:54.960
to let people know what your expectations
are, what is acceptable for behavior

569
00:37:55.119 --> 00:37:59.760
and effort and one is not acceptable
for behavior and effort, And to lead

570
00:37:59.800 --> 00:38:02.679
off see by example, not to
be a hypocrite. If you say this

571
00:38:02.760 --> 00:38:09.320
is the standard of excellence and commitment
that I expect from you, then you

572
00:38:09.400 --> 00:38:14.199
should you should demonstrate that and everything
that you do. And I always tell

573
00:38:15.000 --> 00:38:19.519
folks that you only ever get one
chance to make a first impression, so

574
00:38:19.719 --> 00:38:22.760
make it a good impression. And
it could be we have a situation a

575
00:38:22.760 --> 00:38:28.840
life situation here recently where one of
our tened employees has been promoted into a

576
00:38:28.880 --> 00:38:32.559
mental position and she's in the same
location where she has been for a period

577
00:38:32.599 --> 00:38:37.239
of time. So she's now leading
the team of which she was a co

578
00:38:37.400 --> 00:38:40.719
worker just last week, and I
said, it's still you still have a

579
00:38:40.800 --> 00:38:45.559
first chance to make a first impression
as the leader. They've come to work

580
00:38:45.559 --> 00:38:49.280
with you and they know how you
how you do what you do. But

581
00:38:49.400 --> 00:38:52.559
now you've got an opportunity to,
you know, to make that distinction.

582
00:38:52.639 --> 00:38:58.239
So and then I think you do
that, and then you you say what

583
00:38:58.320 --> 00:39:04.320
you expect, You do what you
say. You have to always try to

584
00:39:04.400 --> 00:39:09.000
lead from the front and let people
know that you have their back. I

585
00:39:09.039 --> 00:39:13.760
always say, as a leader,
when there is praise to be had,

586
00:39:14.320 --> 00:39:16.440
you share it with the team.
You deflect it to the team. I

587
00:39:16.440 --> 00:39:21.199
should say, when there's criticism to
be had, you accept that and you

588
00:39:21.320 --> 00:39:24.360
take that on your shoulders. You
don't publicly be rate anybody that you work

589
00:39:24.400 --> 00:39:29.079
with who may have been responsible for
that negative feedback. Maybe you have a

590
00:39:29.119 --> 00:39:31.800
conversation with them in private, but
from the team's perspective, they get to

591
00:39:31.840 --> 00:39:36.320
know, here's somebody that I can
trust, I'm going to walk through a

592
00:39:36.360 --> 00:39:38.920
wall for them because you know,
they give me the credit that I deserve

593
00:39:39.039 --> 00:39:43.760
and they protect me when they need
to protect me. So that's the best

594
00:39:44.239 --> 00:39:45.960
piece of advice that I can give
to somebody that's, you know, working

595
00:39:46.000 --> 00:39:51.639
into a leadership a leadership role.
And what I've tried to do over my

596
00:39:51.679 --> 00:39:55.559
career is everybody's a little different,
everybody works a little bit different, and

597
00:39:55.599 --> 00:40:00.480
there's no right way or wrong way
necessarily to get to the other objective.

598
00:40:00.880 --> 00:40:04.440
But what I've always said to people
is whether you're working side by side with

599
00:40:04.599 --> 00:40:08.039
someone or if you're working with somebody
that's under you or above, you take

600
00:40:08.079 --> 00:40:12.599
what you like and expand on that. And if there's things that you don't

601
00:40:12.639 --> 00:40:16.079
like, don't focus on that.
Just let it go and don't recreate it,

602
00:40:16.239 --> 00:40:21.360
and you become better. And then
always strive, as I've said before,

603
00:40:22.159 --> 00:40:24.079
always strive to be better tomorrow than
we are today. We can always

604
00:40:24.079 --> 00:40:30.039
do things better, and always the
last thing I would say on that is

605
00:40:31.199 --> 00:40:35.719
just because I might like to do
something a certain way, he doesn't mean

606
00:40:35.719 --> 00:40:37.519
to say has to be that way. We always want to become more effective

607
00:40:37.559 --> 00:40:43.400
or more efficient, but It doesn't
necessarily matter to me how my teammates get

608
00:40:43.440 --> 00:40:47.440
to the end result, as long
as they're operating ethically and efficiently and it's

609
00:40:47.480 --> 00:40:52.760
not creating issues. Why should I
sty me their creativity and I encourage their

610
00:40:52.760 --> 00:40:55.519
creativity. It doesn't have to be
the way that I wouldn't necessarily do it.

611
00:40:57.920 --> 00:41:00.679
And so those are things that I
try to tell folks, Hey be

612
00:41:00.719 --> 00:41:02.599
your own individual self and be the
best version of yourself that you can be.

613
00:41:02.880 --> 00:41:06.719
Love it. It's a lot of
wisdompact there. In a minute or

614
00:41:06.719 --> 00:41:13.559
two. The second question I typically
is what's the best piece of advice you've

615
00:41:13.599 --> 00:41:15.840
gotten NERD that you give about the
consumer banking space in general? Like,

616
00:41:15.880 --> 00:41:19.599
what have you what are the kind
of key things you've learned or advice you've

617
00:41:19.599 --> 00:41:23.519
gotten about just operating in that space. Certainly, the message that I would

618
00:41:23.599 --> 00:41:28.840
want to deliver is that it's a
people business, right, and I think

619
00:41:29.239 --> 00:41:32.320
the struggle that you have as you
get larger on certainly some of these larger

620
00:41:32.360 --> 00:41:38.639
institutions, it's just impossible to have
personal relationships. You know, even when

621
00:41:38.639 --> 00:41:44.559
I worked for some of the some
of the national institutions, you could still

622
00:41:44.599 --> 00:41:47.079
have because of the way that processes
were established and the control that you have

623
00:41:47.199 --> 00:41:52.559
a branch level, you can still
establish some of those personal relationships. I

624
00:41:52.639 --> 00:41:54.000
don't think you can do that.
It's been a long time now since I

625
00:41:54.079 --> 00:42:00.920
worked in one of the what I
consider a large organization, But my guess

626
00:42:00.039 --> 00:42:04.719
is that there is very little personalization. There's not much that can be done

627
00:42:04.719 --> 00:42:07.559
at the local level and the local
branch. It's all structed, it's all

628
00:42:07.639 --> 00:42:13.360
centralized, there is no control.
You're basically a glorified order taker and then

629
00:42:13.360 --> 00:42:15.840
you just you know, the member
may get what they want, but they

630
00:42:15.840 --> 00:42:20.840
don't get a relationship. And so
I think in the community banking space,

631
00:42:20.840 --> 00:42:23.800
in the credit union space, a
huge differentiator for us is the fact that

632
00:42:24.199 --> 00:42:30.280
we can in fact engage with our
members and establish relationships. We have a

633
00:42:30.360 --> 00:42:36.599
leadership forum every week where we have
our senior staff and middle managers and retail

634
00:42:36.760 --> 00:42:42.800
managers on a call to discuss what's
going on across the company and best practices

635
00:42:42.800 --> 00:42:47.320
and what's working well or issues that
we may have. And you know,

636
00:42:47.360 --> 00:42:51.800
one of the things that one of
the managers mentioned this morning was it's great

637
00:42:51.840 --> 00:42:54.440
to be able to sit with a
member in my office and I establish a

638
00:42:54.480 --> 00:42:59.960
relationship with them, and it's not
about selling them a particular product to service.

639
00:43:00.079 --> 00:43:04.079
It's about understanding what this situation is, what their needs are, and

640
00:43:04.119 --> 00:43:07.320
how we can help them meet those
needs. And sometimes the member doesn't always

641
00:43:07.360 --> 00:43:12.280
know exactly what they need. They
might have an idea of what they need,

642
00:43:12.280 --> 00:43:15.360
but we need to spend time listening
to what they have to say and

643
00:43:15.440 --> 00:43:20.679
understanding their story and then explaining to
them how we can make things better for

644
00:43:20.719 --> 00:43:28.000
them tomorrow. Then what today excellent? And my last question is what's one

645
00:43:28.079 --> 00:43:31.840
bold prediction for the future. It's
a scary time to make bold predictions.

646
00:43:32.320 --> 00:43:36.480
I feel like, yeah, but
there it is. A bold prediction for

647
00:43:36.559 --> 00:43:40.639
the future might be that our credit
union will become the largest credit union state

648
00:43:40.679 --> 00:43:44.400
of Maine or not. Currently we're
up there in the number two or three

649
00:43:44.440 --> 00:43:50.199
position as a couple of us buying. Yeah, you know, several years

650
00:43:50.199 --> 00:43:52.800
ago, a long term CEO that
retired at the end of the last year,

651
00:43:53.599 --> 00:44:00.280
at a company training day made a
bold prediction and said he us a

652
00:44:00.320 --> 00:44:04.519
b hag and he said, we
want to be a billion dollar credit union

653
00:44:04.639 --> 00:44:08.239
in a certain period of time.
And back at the time we were business

654
00:44:08.320 --> 00:44:13.119
is probably five years ago. So
we were maybe three hundred and fifty million,

655
00:44:13.679 --> 00:44:15.599
and it's in like forever a way
to be able to reach that kind

656
00:44:15.639 --> 00:44:20.760
of an objective and to do it
organically right, not through any mergers or

657
00:44:20.760 --> 00:44:23.880
acquisitions or apointing there. And now
we see it here, you know,

658
00:44:23.960 --> 00:44:28.400
five or six seven years later and
we're six hundred and fifty million. Good

659
00:44:28.440 --> 00:44:30.480
chance we could seven hundred million,
you know, this year, and it's

660
00:44:30.519 --> 00:44:35.400
like, well, that's not so
far away now, and it's not We've

661
00:44:35.440 --> 00:44:38.599
always preached that it's not a matter
of size, doesn't really matter. I

662
00:44:38.599 --> 00:44:43.159
mean, we know in our industry
in order to be continually successful, you

663
00:44:43.199 --> 00:44:46.159
have to grow. But it's not
growth for the sake of growth, and

664
00:44:46.159 --> 00:44:50.280
it's and you need to approach it, you know, approach it the right

665
00:44:50.320 --> 00:44:53.559
way, do what do the right
thing, and things will you know,

666
00:44:53.679 --> 00:44:58.280
things will work out as you as
you move forward. So I went steady,

667
00:44:58.320 --> 00:45:02.159
as they say, wins a race, right. So I don't know

668
00:45:02.280 --> 00:45:07.360
that that answers to your question necessarily, but I think it's great. I

669
00:45:07.400 --> 00:45:09.519
think the last thing I would do
is I'm going to put in I'm going

670
00:45:09.559 --> 00:45:16.440
to put in the plot here because
you know, somebody asked me what can

671
00:45:16.480 --> 00:45:22.599
we do, What might we do
differently and what opportunities are lying out there

672
00:45:22.639 --> 00:45:25.440
that can assist us to get where
we want to go. You know,

673
00:45:25.639 --> 00:45:30.360
the financial services pie is a certain
size, and so the only thing that

674
00:45:30.400 --> 00:45:32.599
you can do is try to get
a bigger piece of the pie. Right

675
00:45:32.639 --> 00:45:37.880
it's not really I mean yet in
general terms, it's growing a little bit.

676
00:45:37.920 --> 00:45:40.000
But let's assume you're one big pie
there and everybody's buying, you know,

677
00:45:40.039 --> 00:45:43.280
buying for a piece of it.
How do we get a little bit

678
00:45:43.280 --> 00:45:47.920
more and how do we maybe overcome
some of the challenges we have with increasing

679
00:45:49.000 --> 00:45:54.079
costs on the deposit side and narrowing
mogins for example. So for us,

680
00:45:54.320 --> 00:45:57.960
we said, you know, we
want to get a larger share of insecured

681
00:45:58.039 --> 00:46:00.599
lending. We know that as higher
yields there, if we do it the

682
00:46:00.679 --> 00:46:04.679
right way, we can mitigate the
risk that goes along with that. So

683
00:46:04.719 --> 00:46:08.480
we chose to partner with with Upstarts
as a fintech to say, look,

684
00:46:08.519 --> 00:46:10.920
these are a whole bunch of loans
here that we're going to be able to

685
00:46:12.679 --> 00:46:14.719
get and members that are going to
be able to come to us that they're

686
00:46:14.719 --> 00:46:17.440
going to be good loans that are
going to have a high yield and help

687
00:46:17.559 --> 00:46:23.519
us, help us with those that
margin compression, and ultimately, these are

688
00:46:23.519 --> 00:46:28.840
members. One of the points that
I made to our leadership team was these

689
00:46:28.840 --> 00:46:31.840
are loans to folks that we would
not be seeing if we weren't in that

690
00:46:31.920 --> 00:46:38.920
space, because these are folks that
are going to achieve what they want for

691
00:46:39.039 --> 00:46:44.199
financing without walking into a location anywhere. They're just going to go online and

692
00:46:44.239 --> 00:46:45.480
they're going to find out the best
deal and then they're going to get an

693
00:46:45.480 --> 00:46:49.840
offer and it's going to be you
know, through Upstart with main savings,

694
00:46:49.880 --> 00:46:53.480
and everybody's going to be happy.
So and we honestly feel that after doing

695
00:46:53.480 --> 00:46:58.280
our due diligence, we think we're
pretty good in the lending arena and have

696
00:46:58.360 --> 00:47:00.800
been for a long time. We
think there's a huge, huge opportunity in

697
00:47:00.840 --> 00:47:04.039
unseecuted lending. And there's no doubt
about the fact that, you know,

698
00:47:04.079 --> 00:47:07.920
working with Upstart and your unsecured loan
program, we can get not only access

699
00:47:07.960 --> 00:47:12.000
to members that we wouldn't have access
to, but in most cases, if

700
00:47:12.039 --> 00:47:15.320
not all cases, because of the
intelligence that you use to underwrite, you

701
00:47:15.360 --> 00:47:19.280
don't make way better credit decisions than
what we make and we don't have the

702
00:47:19.280 --> 00:47:23.039
fixed overhead now that we would have
attached to lending staff to say we bring

703
00:47:23.039 --> 00:47:28.000
into your loan officers that may find
some loans by pondering with the fintech.

704
00:47:28.199 --> 00:47:34.239
And there's other companies out there that
do offer additional services. We all need

705
00:47:34.280 --> 00:47:37.320
to have additional revenue, and the
struggle that we will look at is how

706
00:47:37.320 --> 00:47:38.679
can we replace some of the revenues
that are going to go away and the

707
00:47:38.760 --> 00:47:43.639
challenges that we have with those going
away, which is substantial. How do

708
00:47:43.679 --> 00:47:46.519
we offer additional products and services that
can help us replace that revenue that will

709
00:47:46.559 --> 00:47:51.639
eventually go away, And certainly the
program we have with you guys will help

710
00:47:51.719 --> 00:47:54.039
us do that. So we appreciate
that well they I appreciate the plug,

711
00:47:54.039 --> 00:47:58.639
and hopefully we can help you become
the largest credit union made. I think

712
00:47:58.639 --> 00:48:00.239
that was the ball prediction. Saw. I like that. Thank you so

713
00:48:00.320 --> 00:48:04.880
much for joining me today and sharing
I think a lot of insightful perspectives.

714
00:48:04.920 --> 00:48:07.000
I really appreciate your making the time. Yeah, it's been my pleasure,

715
00:48:07.039 --> 00:48:09.960
and we appreciate the opportunity to spend
some time with you guys. I'm looking

716
00:48:09.960 --> 00:48:14.920
forward to continue to work with you. As we're moving forward, Upstart partners

717
00:48:14.920 --> 00:48:19.320
with banks and credit unions to help
grow their consumer loan portfolios and deliver a

718
00:48:19.400 --> 00:48:23.960
modern, all digital lending experience.
As the average consumer becomes more digitally savvy,

719
00:48:24.239 --> 00:48:29.679
it only makes sense that their bank
does too. Upstarts AI lending platform

720
00:48:29.840 --> 00:48:36.079
uses sophisticated machine learning models to more
accurately identify risk and approve more applicants than

721
00:48:36.119 --> 00:48:42.159
traditional credit models. With fraud rates
near zero, upstarts all digital experience reduces

722
00:48:42.239 --> 00:48:47.079
manual processing for banks and offers a
simple and convenient experience for consumers. Whether

723
00:48:47.119 --> 00:48:52.840
you're looking to grow and enhance your
existing personal and auto lending programs or you're

724
00:48:52.840 --> 00:48:57.840
just getting started, Upstart can help. Upstart offers an end to end solution

725
00:48:57.920 --> 00:49:00.840
that can help you find more credit
worthy barrow within your risk profile. With

726
00:49:01.039 --> 00:49:07.519
all digital underwriting, onboarding, loan
closing, and servicing, It's all possible

727
00:49:07.519 --> 00:49:12.199
with Upstart in your corner. Learn
more about finding new borrowers, enhancing your

728
00:49:12.199 --> 00:49:16.440
credit decisioning process, and growing your
business by visiting upstart dot com Slash four

729
00:49:16.639 --> 00:49:22.400
dash Banks. That's upstart dot com
Slash four dash banks. You've been listening

730
00:49:22.400 --> 00:49:27.280
to leaders and lending from upstart.
Make sure you never missed an episode.

731
00:49:27.400 --> 00:49:30.800
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732
00:49:30.880 --> 00:49:35.199
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733
00:49:35.199 --> 00:49:37.119
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