How Idaho Central Credit Union grew into the biggest financial institution chartered by the state

Good timing, thoughtful lending, a personal touch and nonprofit status have helped Idaho Central Credit Union.

zkyle@idahostatesman.comMay 29, 2013 

ICCU's green wave started sweeping across the southern half of Idaho about the time the state began feeling the effects of the recession in 2008.

Pantone 555 - a shade similar to forest green and similar to money - splashed across more billboards and signs and debit cards each year.

The color became the signature of Idaho Central Credit Union by 2012, when it topped $1 billion in assets and surpassed Home Federal Bank of Nampa as the largest state-chartered financial institution in Idaho.

"Everybody knows our shade of green now," says CEO Kent Oram. "I heard someone say, 'Everywhere I turn, there's you and your team with green on.' That's music to my ears."

The credit union is still growing fast, reporting $1.35 billion in assets in the first quarter, 135,959 members and 20 branches, including 13 in the Treasure Valley.

The second-largest credit union in Idaho is Potlatch No. 1 Federal Credit Union, which held about $522 million at the end of March.

ICCU was rated the top-performing credit union in the nation in 2012 by SNL Financial, an industry analytics firm. The rating was based on member growth, net charge-offs as a percentage of average loans, operating expenses as a percentage of operating revenue, delinquent loans as a percentage of total loans, and market growth.

ICCU bucked industry trends by roughly doubling its membership, assets, loans and deposits since 2008.

Careful lending served the credit union well, says Peter Crabb, professor of finance and economics at Northwest Nazarene University in Nampa. ICCU's growth could also indicate a growing distrust in the large national banks.

"I'm surprised at their growth as well," Crabb says. "There is a likelihood they may have grown regardless of what was going on in the economy. It may be part of a consumer trend going on where people don't trust the bigger banks as much as they used to."

Not bad for an outfit that started as a credit union for employees of credit unions.

WHAT RECESSION?

Oram started working at ICCU in 1984 as a data-processing manager overseeing a department of four. ICCU had one server then to store records and transaction data. It has 85 now.

He was promoted to executive vice president three years later and to CEO in 2007, right before the rosy economy fell into recession.

"I didn't know enough to be afraid," Oram says.

The following years were scary for many small Idaho financial institutions.

In 2009, 18 small banks in Idaho combined to lose more than $69 million, thanks to widespread defaults on home mortgages and commercial loans.

ICCU, however, didn't have many bad loans on its ledger, or many loans at all.

The credit union's mortgages declined from $14 million in December 2003 to less than $6 million four years later.

The conservative approach kept the credit union out from under the collapsing housing market, but it also positioned Oram and his team to grab a share of the mortgage market.

"We made a prediction we were at the bottom (of the recession), so it was time to go," Oram says. "It played out well. It could have gone the other way, but it didn't."

The credit union ramped up mortgage lending to $22.5 million in March 2008. ICCU's mortgage ledger has grown to nearly $145 million by March 2013.

The credit union also approved its first-ever commercial loans in 2009. They grew to $53 million in March of 2013.

SMALL BEGINNINGS, SMALL-TOWN FEEL

In 1940, six founding members opened the original ICCU in Caldwell. The headquarters later moved to Pocatello, then to Boise, then to Chubbuck, which borders Pocatello.

ICCU opened its membership to the public in the 1970s but didn't start growing much until the 1990s, Oram says.

The credit union made changes to appeal to new members, including offering auto loans at dealerships, keeping branches open on Saturdays, and offering the free checking that remains in place today.

Like all credit unions, ICCU is a nonprofit, which means it has neither shareholders nor income or property taxes to pay.

As a result, Oram said credit unions are better able than banks to keep fees low and to preserve a small-town feel.

"Typically, if you are an average Joe or Jill, credit unions can typically do a little bit better for you," Oram says. "Joe and Jill Lunch Box. That's who our members are. That's our sweet spot."

One of those Joes is Tony Pori of Boise, who started, owns and runs a tutoring business, The Math Advantage.

He and three employees travel around the city to tutor junior high and high school students.

Pori joined the credit union in 2000. He handles accounts for his tutoring business in ICCU accounts and financed his home on Roanoke Drive with an ICCU mortgage.

He says he grew frustrated dealing with another credit union years before when a mortgage on another house was sold to a mortgage processing company.

That wasn't the case at ICCU, which kept his mortgage.

Pori spoke to a branch manager when he paid off the mortgage several years ago and was surprised how quickly the process wrapped up.

"That was it. It was done," Pori says. "They had all the information they needed. To me, that's old-fashioned banking. They aren't going to sell it to some foreign institution or package it with other loans and leave you with no recourse."

Becky Hoth Sievers likes to support local businesses. She buys coffee at Bodacious Bean or Buzz when she can.

She's deposited her paychecks at ICCU since 1991. Her children enrolled in ICCU's Share Bears savings program for children under 10 before becoming adults. Now 18 and 19, they are still members.

Hoth Sievers says the credit union has taken care of her, especially when a lending agent came to the closing of her home instead of filing the paperwork electronically.

"They have gone above and beyond for me," she says.

Zach Kyle: 377-6464

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