Bellco CEO eyes `product partnerships' as key to hitting $1 billion asset mark

<p>CU Times Southwest Correspondent DENVER – Douglas A. Ferraro, president and CEO of Bellco Credit Union here, admits he dislikes the “political” jockeying that sometimes occurs in both state and national trade groups, which is why he has never-so far at least-sought any of the top leadership chairs. The backroom politics “can get pretty obnoxious,” argues the 40-year-old Ferraro, often described by his peers as a thoughtful, driven but highly respected, ex-whiz kid who through his results-oriented leadership has brought the Denver CU to new heights. At $1.2 billion in assets, Bellco is one of the top financial performers in the country. A key to Ferraro’s success with Bellco-tripling assets during a 10 year period while posting a capital asset ratio of 12.6 (peers at 10.9%)-has been, say his associates, his focused attention at serving real member needs and creating diversified product “partnerships” with CU co-ops across the country. “I do like the idea,” declares Ferraro “of working with like-minded credit unions who share our goals in developing product partnerships,” something he said is not always possible within Leagues or in CUNA even though he is a member of the Colorado League Board and of several key CUNA committees. Indeed, Ferraro is vice chairman of the Colorado Division of Financial Services Board serving since July 2001 having been appointed by the Colorado governor. The former Lakeland, Fla. accountant claims he gets special job satisfaction by finding new ways to help existing members, and his Colorado peers have lauded him for his dogged pursuit of some of the most innovative third party product arrangements. His ventures have ranged from a successful indirect pact with Colorado auto dealers, to the formation last year of a trust company owned by six Denver and Colorado Springs CUs. Meanwhile, Ferraro has actively participated in several high-level CU “software” co-ops which have been pursuing investment, insurance, tax and internet products. A member of the 20-CU Members Gateway Group, Ferraro is also chairman of Open Financial Solutions, a nine-member CU coalition based in San Francisco that has been working with vendors to come up with new on-line financial planning and bill payment products aimed at “strengthening our relationship with members.” “Right now is probably the most exciting time for credit unions since the introduction of share draft accounts,” professes Ferraro. Considering the “consolidation taking place in banking”, Ferraro maintains CUs have an ideal opportunity to “increase their role as the financial services provider for their members” and keep them out of the hands of banks. Though the partnerships “and industry cooperation, we can be as sophisticated as the big banks, while capitalizing on our local focus to win the primary relationship of consumers and small business,” he argues. “When we fail to meet member needs, we expose our entire relationship to capable competitors who are very good at selling,” he says. But CUs have to understand that meeting member needs requires “a comprehensive choice in product, service and delivery options including complex online services, real estate loans, trust, financial planning and investments,” Ferraro emphasizes. Beyond his work with co-ops, Ferraro is highly regarded in the state for his “grooming” skills in eyeing management potential who eventually move on to other institutions. Ferraro joined Bellco in 1991 but landed his first CU job with Jax Navy Federal Credit Union in Jacksonville, Fla. “Doug is one of the brightest guys I know who is simply relentless in the pursuit of excellence,” declared Kyle Markland, former Bellco executive vice president and chief financial officer who left in 1998 to become president and CEO of Affinity Plus Credit Union in Minneapolis. Ferraro, said Markland, “was way ahead of his time” when he made a decision several years ago to become one of the first in Colorado to open teller-less branches. “I also remember a decision very unpopular with some members and the board to move our main office across town.” It turned out the relocation cut expenses and “was the right thing to do,” commented Markland. Two other recent Ferraro “alumni” include Rod Staatz, (cq) president/CEO of University of Wisconsin Credit Union in Madison, also a former Bellco executive vice president, and Vince Fandel, president of First Choice Community Credit Union in suburban Wheat Ridge and former Bellco vice president. Ferraro has won particular praise across the state for his role in shaping the seven year-old CUILA Inc., the indirect auto loan firm owned by 40 Colorado CUs and used by 52 of them. “Doug has managed to raise the comfort level of many small credit unions by making sure everyone benefited from the arrangement regardless of size,” recalled Carla Hedrick, chairman of the Colorado League and president of Denver Community Federal Credit Union. Some small CUs in the state had been concerned about losing control over new members solicited through dealers, she said. Ferraro is proud of the fact that CUILA now has more than $8 million in loans and expects to reach $1 billion. “And we don’t have the situation in some other states where some credit unions are out doing their own thing with dealers,” said Ferraro, noting of such problems in Missouri and Florida. As of yearend 2001, Bellco had 75% of assets in consumer loans and a loan-to-share ratio of 93% as compared to 75% for peers (over $250 million). Of members with credit cards, it has 41% penetration compared to 20% for peers and 57% on members with checking accounts vs. 49% for peers. Bellco’s return on assets was 1.8% in 2001, up from 1.5% in 1998 and 0.6% in 1990. It currently has 280 employees and 133,000 members, an increase of 8,500 from two years ago. Born in Chicago and raised in Daytona Beach, Fla, Ferraro graduated in accounting and computer science from the University of Central Florida in Orlando where he was summa cum laude. He got his first job as a senior accountant with Carter, Belcourt & Atkinson of Lakeland, Fla. where he served four years. Deciding he wanted a more pro-active role in “making things happen,” Ferraro felt his talents in computers as well as auditing could be put to better use outside of accounting and he landed a job at Jax Navy FCU”with an extremely innovative aggressive guy” – Robert W. Bream, now president and CEO of United Airlines Employees Credit Union in Chicago. Ferraro was hired as senior vice president of finance and operations/CFO at Jax. “We worked very well together, and he taught me a lot,” said Ferraro noting the two managed to sharply reduce back office expenses at Jax Navy FCU. The two “surprised ourselves” with how quickly the turnaround was accomplished, and Ferraro said he found Bellco in 1991 “having some of the same symptoms but not nearly as severe with operations eating up the cost structure and inefficiencies in the computer system.” When he’s not “burning the midnight oil” for Bellco, Ferraro, who plays hockey, can be seen at many Denver Avalanche pro hockey team matches He has also been active in fund-raising for the University of Denver hockey team – [email protected]</p>