Despite nervous markets and investors, CUSO Financial Services posts strong revenues

SAN DIEGO – Given the past and present economic conditions and fluctuating stock market, CUSO Financial Services, L.P. is forging ahead seeing its revenue grow by an astounding 385% since its startup more than three years ago “There has been a continuing strong demand from credit unions for quality member investment programs, products and services in order to compete with banks and other financial institutions,” said Valorie Seyfert, CEO of CFS, a full-service financial broker-dealer and registered investment advisor operating exclusively for credit unions and their service organizations. CFS said while other broker-dealers have seen a 30 to 40% decline in their business over the past couple years, the firm has “grown steadily stronger,” posting annual revenues of $4.98 million in 1999, $15.36 million in 2000, and $24.14 million in 2001. Projected revenue for 2002 is between $35 and $40 million. The company began operations in 1996 with eight employees and $1 million in start-up capital from its credit union investor partners. It now has 45 employees and is “sufficiently capitalized” after undergoing two additional capitalization phases. Seyfert said part of CFS’s growth is “the company painstakingly developing an aggressive but practical strategic plan and a solid business model.” She also credits their credit union client listing, citing that many are among the top-rated in the nation. Both Seyfert and Amy Beattie, who is the company’s COO, have backgrounds in investments, law and trading. CFS’ client list includes 24 of the top 100 credit unions in the nation, including third ranked Pentagon Federal Credit Union, seventh ranked Orange County Teachers Federal Credit Union and eleventh ranked Patelco Credit Union. In San Diego, number two-ranked Mission Federal Credit Union and number three-ranked North Island Financial Credit Union are CFS clients as well as strategic partners, and both credit the broker-dealer with helping grow their investment programs since joining CFS in 1999. “CFS offers a state of the art automated online trading system for do-it-yourself investors, as well as face to face advisory services, which together provides our members with full-service capabilities,” said Brett Everhart, COO of North Island Financial Credit Union’s CUSO. “Their strengths lie in their consistently dependable and accurate operations capabilities, and the fact that they are innovative, flexible, objective and open to our suggestions and advice. We also appreciate the fact that they operate exclusively for credit unions, so their expertise and experience is focused on our business.” Tom Leyva, CEO of Mission Federal Service Corporation, feels that “CFS’ high level of service has put the company squarely on the growth fast track.” “They are always accessible, and they are extremely responsive to our requests and inquiries,” Levya said. “They maintain excellent relationships with their strategic partners and vendors, and offer us valuable advice with regard to program management.” Both Everhart and Leyva like the fact that CFS brings key people together periodically to discuss ideas and strategies for making improvements and moving everyone’s business forward. “Many of us have similar business templates,” Everhart said, “so it’s extremely helpful and productive for us to get together to share best practices.” CFS benefits from the additional revenue generated by increased numbers of program participants. Credit union clients receive a percentage of the commissions from trades while partners share in the broker-dealer’s bottom line profits. CFS began showing profits last year and is on track to allocate more than $1 million profit to its partners in 2002. -