6 FOCUSREPORT /The State of Brick & MortarAs members turned to online and mo- bilebankingoptions to stay safe duringthe pandemic, speculation surfaced over whether the trend –which is expected to keep growingpost-COVID – would lead executives to invest more resources intechnology and shed their branchfootprint by permanently closingsome locations.
While some credit unions havetaken that path, others are opening new branches. That’s because,they said, the old brick-and-mortar channel still offers them thebest opportunity to establish a local market presence that attractsnew members for future growth.
The $964 million Marine CreditUnion in La Crosse, Wis., sawits members increasingly preferonline and mobile banking, andCOVID accelerated that trend. Atthe end of 2019, more than 19,000of Marine’s 76,858 members wereusing online banking. At the endof last year, that number soaredto nearly 35,000, according to thecredit union’s NCUA Call Reports.
“Habits have formed; consumers have spoken. Our ability toadapt quickly allows us to betterserve members now and into thefuture,” Marine President/CEOShawn Hanson told CU Times lastJune after he made the decisionto consolidate the credit union’sbranches from 37 to 19.
Marine said it knew the deci-
sion to close 18 branches would
cause some members to leave,
but the overall attrition has been
less than what the credit union
anticipated. According to its Call
Reports, Marine lost 806 members
from June to December last year.
“As with any change, some
members have adapted well and
are excited to be able to do more
remotely with digital tools, while
others have struggled,” Marine
Chief Experience Officer Adam
Keer said. “Many simply needed
more education on our digital
tools and have
efficiency of be-
ing able to man-
age their financial
needs without hav-
ing to leave their
While a few
members have ex-
pressed they miss being able to go
into a branch office, he said, some
of the most powerful member
service stories are about helping
members connect to the broader
digital world in 2020. “That con-
nection has helped them become
closer to their family and commu-
nities,” Keer said.
Last August, the $282 millionMonterey Credit Union in Monterey, Calif., decided to permanently close three of its sevenbranches, according to a reportin the Monterey County Weekly.
Kathy Aliotti, vice president of
member services, told the news-
paper that it wasn’t just the
pandemic that led to a slowdown
in its in-person banking – since
1999, foot traffic has declined byabout 80%. The credit union didnot return CU Times’ requests foradditional comments.
While the adoption of onlineand mobile banking is expectedto keep growing once the pandemic finally ends, executivessaid the branch remains a viablechannel for growth opportunitiesin new markets, where establishing a brand and community presence is essential to attracting newmembers.
Those new markets includerural or semi-rural locations thathave been abandoned by banks,areas where there is little competition, regions that have becomeunderbanked despite sizeablepopulation growth, and in smallercities that dot the expanse in between or are just outside majormetropolitan centers.
In February, the $66.9 millionAmerican Partners Federal CreditUnion in Reidsville, N.C., openeda new branch in Rocky Mount,Va., about an hour’s drive north ofReidsville. APFCU President/CEOBrian Bone said his credit uniondoesn’t want to open shop in bigmetro areas because it would betoo difficult to compete.
“But in rural America, which
the banks are retreating from, we
see an opportunity,” Bone said.
“And we believe that we can do
real bona fide help in those com-
munities. And so, we’re looking
at this branch as kind of our hub
to radiate from the center of the
APFCU bought its new loca-
tion from a big bank. “We see that
as an opportunity because what
happens is, especially among
people of lesser means, it’s go-
ing to be hard for them to get in
the car and drive an hour to get
to a branch,” he said. “You are
very correct that people are mov-
ing to online banking and I don’t
think that’s going to change. But I
think there’s also a huge need for
people to have the ability to have
a conversation with someone at a
local branch, not with someone
in a call center hundreds of miles
Arlington, Texas sits in the
middle of the enormous Dallas-
Fort Worth metroplex. In between
those big cities are more than 200
small cities and towns, which
have been a sweet spot of growth
for Texas Trust Credit Union.
When Jim Minge was namedpresident/CEO of Texas Trust 10
years ago, the credit union wasmanaging about
$600 million in assets and operatingonly six branchesserving 50,000members. Througha combination ofmergers and organic growth, thecredit union hasgrown its assets to $1.5 billionin assets and currently operates
19 branches serving more than
In February, the credit unionbroke ground for the constructionof its third branch in Grand Prairie, a sizeable city that is home tomore than 175,000 people.
But Minge said Texas Trusthas primarily focused on opening branches in those small cities sandwiched between Dallasand Fort Worth. It operates locations in at least seven small cities:Athens, Flower Mound, Bedford,Mansfield, Hurst, Cedar Hill andMidlothian, all of which have populations under 100,000.
“We were blessed a few years
ago to put up a facility in the
Midlothian area (population:
29,000) and we built a great book
of business there,” Minge said.
“I think that business came to us
because we had a facility there
and we have been active in the
community. That approach has
worked well for us.”
Market research convinced the
$6.2 billion Wright-Patt Credit
Union in Beavercreek, Ohio to ex-
pand its branch network in Ohio’s
capital city, Columbus, from six to
10 over the next two years. From
2010 to 2019, the population of
Columbus has grown by more
than 14% from 787,033 to 898,533,
according to the U.S. Census. This
year, the city’s population is pro-
jected to top 913,921.
“Columbus, despite its growth,
is underbanked, and the way
that is measured is that there is
one bank branch for every ‘X’
households and the consultants
we worked with said, typically
you see that [X] number around
1,000,” Wright-Patt Chief Strategy
Officer Tim Mislansky said. “And
in Columbus, that
number is signifi-
cantly higher in
that there are a lot
per bank branch.”
Though many of
the credit union’s
he noted members keep saying
loud and clear that they still want
branches to visit when they need
“The technology is great, and
we know we need to continue
investing in that and offering our
members more,” he said. “But we
also know when a member needs
us, we want to be there if they
want to come in, sit down and
talk to us face-to-face, because we
know them and we know a signifi-
cant number of our members still
Because members seem to
want the best of both worlds,
Mislansky pointed out, it is be-
coming more challenging for
credit unions to determine how
to maintain enough of a brick-
and-mortar presence for growth
while also investing sufficient re-
sources in technology to remain
“It’s not so much of a questionof doing either or, it’s more of aquestion of how much of a dollardo you spend on physical branches versus how much of a dollar doyou spend on the digital side of it,”he said. “It’s a balancing act because you’ve got to spend moneyin both places.” n
What Does the Future Hold for Credit Union Branches?
Y Many members turned to online and mobilebanking to stay safe during the pandemic.
Y That trend is expected to keep growing post-COVID, fueling speculation that the branch willbecome obsolete.
Y Some CUs have permanently closed branches,but others keep opening them as they stillserve as an important growth strategy.
Rendering of Texas Trust CU’s new branch in Grand Prairie, Texas.