The Next Generation of Credit Union CEOs Looks Just Fine

WEST PALM BEACH, Fla. – Industry concerns about a shortage of credit union CEO talent may be overblown. For a few years now, there have been ominous statistics floating around such as within the next five years 25% of credit union CEOs will retire. Who will step up and fill these slots? Credit Union Times scanned the country and found there is a lot of young talent already in prominent credit union CEO positions. Many of these CEOs are under 40 and could have 20-plus years to give to the industry. What is so fascinating is how diverse this group is. Some have backgrounds in technology or marketing, hail from the banking sector or have regulatory experience. They also credit different factors for landing their first CEO job. Whether it was a bit of good luck with an existing CEO retiring, or agreeing to take over a CU in trouble just to get that first CEO experience under their belt. Here is a look at six of them. For 40 somethings, each one of them has already had a vibrant career in the credit union industry. 39 years old CEO of Texas Bay Area FCU Pasadena, Texas Assets: $160 million Advice to aspiring CEOs: “If you don’t have a solid foundation at home I don’t think you can be successful at anything.” Jesse Gutierrez landed his first CEO job when he was just 27 years old. “You have to take some risk if you want some reward. If you’re going to try and stay in your comfort zone in your entire career, don’t expect you’re going to become a CEO,” said Gutierrez. His credit union career started early. Gutierrez landed his first job at Gulf Coast Educators FCU while he was attending the University of Houston. He worked at the CU throughout his college career and learned every aspect of the business during his five and a half years. Shortly after he graduated he moved to a larger CU, First Community CU in Houston, as vice president/controller – a tremendous job for a recent grad, he admits. But after just two years into that job, Gutierrez saw his chance at the corner office. “There was a credit union in trouble that needed someone with a lot of energy and experience,” he said. It was Memorial Hermann CU in Houston, a hospital based credit union. When Gutierrez arrived it had just $7 million in assets, 4% capital, a Letter of Understanding from NCUA, and wasn’t making money. “I didn’t have to take a cut in pay, but it was definitely a step backward when you go from VP in a $120 million organization to leading a $7 million credit union in a lot of trouble.” But while it was a risk, it was very calculated. “I felt at that point in my career, if I made a mistake and couldn’t successfully turn that credit union around, I would be able to recover because I was young enough.” Gutierrez said he felt a tremendous sense of duty to the job. “It was a challenge, it was exciting. I felt those people really gave me a chance and I was going to make good on it.” That he did. “We put in risk based lending. Loans grew by 74% one year. It was one of those deals where we just took off like a skyrocket and started making a lot of money. At one point in time we were up to 3% ROA and in the top 5% in the nation. “Seven years after arriving, the CU ballooned to $21 million in assets, capital was over 7% and it had strong ROA. Gutierrez said that job taught him about the challenges small CUs face. “When you go to a small credit union you can’t say I’m the CEO and delegate because there’s no one to delegate to. You have to become a teller, a collections officer, a loan officer. There’s nothing you can be above doing.” If this first CEO job wasn’t risky enough, Gutierrez then moved to Aldine Teachers CU as CEO. “Aldine Teachers had good capital, they just were all mixed up because they had a CEO who committed fraud,” he said. When you come into a fraud situation, building trust with the board is critical. “You have to be a great communicator if you’re going to be a CEO, you have to know financials and the most critical relationship is the board. You have to develop a good communication style with your board.” Trust is built by good communication and of course performance, he said. Once again Gutierrez helped right the ship, and next moved to his current job as CEO of Texas Bay Area Employees CU. In his first year, loans grew 24% and assets were up 7.5%. This year the CU is projecting 1.25% ROA. But Gutierrez believes you can only quote stats so much, being a CEO is more than that, and young CEOs sometimes have to deal with things older CEOs don’t. “You might have an issue where you have older people reporting to you. I had military background in the Air Force reserve unit that helped me. I had Vietnam vets on my crew. When you’re in charge of people like that you learn to show them respect, just as you would show your parents respect. You don’t order people around. You’ll get a lot more out of them by showing you value their contributions, than barking orders and saying `I’m the boss, do as I say’.” A solid home life is also a contributor of success. “I had a very supportive wife. We did not have children when I first started this journey. I was already CEO for four or five years before my first son was born. You’re talking long hours, trips away from home. You have to have the support at home to keep you going.” Gutierrez believes the talent shortage isn’t as bad as people think. “In my opinion there are plenty of young energetic people coming in.” Interestingly, Gutierrez recalls working the drive-thru lane of Gulf Coast with Jim Warren, who today is CEO of Tyndall FCU. “I remember being in the drive-thru by ourselves, studying our books, saying one day we’re going to be the boss. He was CEO before I was, but we both hit the mark at about the same age.” Roger Ballard -”The Communicator” 37 years old CEO of nuVision Financial FCU Huntington Beach, Calif. Assets: $665 million Ballard on Communicating: “I try to de-emphasize my title with employees. I find it can be a barrier to communication.” You don’t hear of many technology professionals working their way up to CEO, but maybe you don’t know Roger Ballard. Ballard was a tech guy when his CU career started. While working his way through a Manager of Information Systems degree from Cal State in Sacramento he landed an IT job at The Golden 1 CU. “It was close by. My parents had been members for years. My first job was in the networking area. It was myself and one other person. This is when PCs were really just starting out. Back then most IT was focused more on the mainframe.” It turns out, said Ballard, IT is a great way to learn the credit union business. “To provide better advice and solutions on the IT side, I had to know what business purposes we were trying to accomplish.” He noted that he was always more of an MIS guy because of his college background. “MIS is not as techie as computer science. It’s more of a business orientation, how IT applies to business.” And The Golden 1 was a great laboratory. It was one of the early pioneers in ATM networks, indirect lending, online solutions, and other remote services Ballard’s tenure at The Golden 1 saw him work with a virtual Who’s Who of credit union CEOs-Judy Flores, Patsy Van Ouwerkerk and Bob Siravo-all who eventually moved on to CEO positions, were there at the time. “A key mentor in my career was Bob Siravo. I don’t know if he knows the impact he had on me. Candidly, when he got hired as CEO of Network FCU, he saw more in me than I saw in myself and gave me an opportunity to help in a turnaround situation,” said Ballard. “I like to say I got 10-15 years of experience in two or three years work there.” Ballard followed Siravo to Network and the two dealt with a number of challenges including loan losses, a shaky lease portfolio, expense issues and others. “We had to do things there that you would normally do over time, like close some branches. You wouldn’t necessarily do that in a quick time frame, but challenge is a great catalyst for action,” said Ballard. Ballard saw his chance at a CEO position come rather quickly, but it meant relocating, something Ballard believes young execs need to be willing to do. “It’s not to say you can’t become a CEO in your area, but the opportunity pool is much smaller. I figured I’d rather go earn my stripes early in my career by moving, so maybe late in my career I’d have some more options. I’ve seen some people who wanted to be CEO stay in senior manager roles because they weren’t willing to move.” The move took him from California to Community Financial in Michigan – he was just 25. Though young, Ballard said he didn’t feel like a young hot shot. “When you get the top job, you can almost get a big head. There is that risk. You really as CEO have to be confident in your ability, but don’t think too much of yourself personally. If you do, it may cause you to not be open enough on how you can improve, you can get in the way of yourself.” Being a young CEO does have some inherent challenges. “My sense is that you don’t get as much automatic respect, you have to earn it a lot more. To me you have to stick to two ears and one mouth. Communication is more about listening. That’s one thing I’ve worked on, being a good listener.” Ballard eventually landed back in California at nuVision where he took over for a former Golden 1 colleague, Judy Flores. “Time with family was a draw for us with this job. My wife and I are both from Northern California. The majority of our family is here. With the ages of my kids, I’ve been to Disney Land 10 times in the last six months,” said Ballard, the father of four young children. His advice to aspiring CEOs is “communicate, communicate, communicate. Keep that drum beat going, or else it’s hard to stay focused and get that message out there clearly.” He also believes young CEOs have a duty to mentor employees, the way he was mentored by Siravo. Maureen Tebo – “The Visionary” 37 years old CEO of Nations Heritage FCU Attleboro, Mass. Assets: $90 million Tebo on management style: “I like to think of myself as a conductor that orchestrates a lot of other aspects.” What’s striking about Maureen Tebo is how much she’s done in the industry in such a short time. She has criss-crossed the country doing what she loves most, running credit unions. She credits her chance at the corner office to another young CU leader. “When I was at Justice FCU CEO as CFO Jeff Moore was young too and saw a lot of potential in me. He took the time basically to mentor me and expose me to a lot of areas that most CFOs don’t get to see.” Tebo eventually moved on from Washington, D.C.-based Justice FCU to Public Service CU in Denver working under CEO Dave Maus. After a few years, she heard HP Rocky Mountain FCU in Loveland, Colorado was seeking a new CEO. She was intrigued. It was an interesting situation. The credit union was so closely tied to its sponsor, Hewlett Packard, that CU employees were actually HP employees. “I was one of the first non-HP employees to run the credit union. They ran the credit union more as a department of HP, when many of the members weren’t even working at HP anymore.” Tebo said she brought that CU just what it needed at the time – a true credit union person who understood credit unions and could look beyond the HP influence. She helped broaden the staff’s view to look at members as members and break away a bit from the HP umbrella. Eventually the CU was merged into what is now Addison Avenue FCU, a merger really driven by HP. Tebo had the opportunity to stay on board with Addison Avenue, but not as CEO. After having a taste of running the show, she didn’t want to give it up. “I found once I had the opportunity to be the CEO, I really enjoyed being involved in the strategic plan, helping to set the vision, doing the higher level things. I wasn’t willing to step back.” So from HP, she again filled up the moving truck and ventured to Cheyenne, Wyoming to run Warren FCU, an Air Force based credit union. When she arrived it was a $100 million CU with about 20,000 members. Her focus was to make it more of a community player. “Although still a SEG-based CU, we really worked on developing our standing with the community,” said Tebo. And that it did, earning a number of community awards from local newspapers and charities such as the United Way. Tebo also served on the Chamber of Commerce to try and up the CU’s profile. By the time she left four years later, not only was the brand more well-known, the CU grew to $160 million in assets, opened three branches and a new call center. “One of the things I really enjoyed at HP and Warren was the ability to bring a vision to the organization, a vision of growth and showing them how to get there. It’s exciting, and you’re able to make the work exciting for everyone. We had a good time.” Tebo’s career took still another turn. After helping to grow Warren, she decided to move back to the East Coast and get involved with a turnaround situation in Nations Heritage FCU. “It’s the old East Coast Texas Instruments CU. Due to a significant downsizing the CU was quite frankly not doing well. It had negative .26 ROA in 2003,” she said. In less than two years, things have started to blossom. As through May 31, the CU is now at positive .08 ROA. “I took on the job to get them out of their financial difficulty and orchestrate an expansion. We have a community charter for nine towns in Massachusetts and we have an underserved community in Tennessee,” said Tebo. All that adds up to a lot of potential, which Tebo wants to realize. Her approach is to be hands off and let the talented staffers do their thing. “I’m more of a visionary, who wants to bring collaboration.” Jonathan Hullick – “The Analyst” 38 years old CEO of First Florida CU Jacksonville, Fla. Assets: $200 million Hullick on career choices: “Anything can be dangerous for your career, but I like to be in a situation where I can help things grow and improve.” Jonathan Hullick’s experience combines two backgrounds that makes him a rarity. Hullick has considerable banking experience. He served as COO and CFO for a community bank in a turnaround situation in Pennsylvania. He also worked for a commercial bank in New York. The credit union industry has seen more former bankers join the CEO ranks, but Hullick also has something else – regulator experience. He spent six years a senior examiner with the FDIC. That background screams one thing – risk management and financial expertise. He is a CEO who can sit down with the CFO and talk numbers. He can sit down with examiners and talk risk management, talk ALM, and on and on. In some ways, he doesn’t think CUs and banks are much different. “I think operationally how you manage risk and how you manage operations, and how you lead people, it doesn’t matter if it’s a bank or a credit union,” said Hullick. On the other hand, there is an organizational difference between the two that equates to a strategical difference. “There are fewer constituents to worry about. You don’t have shareholders to be concerned about. Here the focus is entirely on meeting members’ needs and expectations. As a former banker that is compelling. At the end of the day you drive home at night feeling good.” With his eye for risk management, Hullett does have some concerns about credit unions. He thinks they should be careful about getting into banker areas too quickly. “With business lending there is great potential for good, but significant risk. The analysis needed to properly assess credit risk on a business loan is much different than the analysis credit unions are used to performing on auto loans and mortgages. We all know what happened to a lot of the community banks in the late `80s and early `90s in Texas and New England.” Hullick is also very concerned about interest rate risk. “It’s still looming. Credit unions have a lot of embedded options. As the rate environment continues to change, the effect of those options should be a concern industry wide. It’s getting a lot of attention on the banking side, but not as much on the credit union side even though the balance sheets look the same.” Hullick had to relocate from Omaha, Nebraska to Jacksonville, Florida to land his first CEO job. “It wasn’t a tough sell for my family. On the day we arrived it was about 4:00 pm. We were on the beach by 6:00 pm.” Hullick, has his own unique issues to deal with at First Florida, one of the biggest being who he replaced. “I’m succeeding Larry Kirkman who was CEO back in the `70s when the CU had just $2 million in assets. He grew it to $200 million. Everyone loved Larry, for many of my staff he was the only CEO they worked for. It’s incumbent on me to build a relationship with them. I can’t be Larry Kirkman, what I can be is an effective leader, coach, mentor and member of the team. That’s what I’m focused on.” Family is crucial for Hullick and he respects the sacrifice the other family members have made for his career. His wife and he have three young children, who he is sure to make time for. “Obviously at this point with the children being so young, my wife stays at home. I make a lot of effort so I’m home early in the evening. And if I have more work to do I do it later at night after the kids have gone down.” Kim Sponem – “The Protg” 38 years old Great Wisconsin CU, Madison, Wis. Assets: $325 million On how not to lead: “I had one manager early on in my career that was a real micromanager. I learned so much about what not to do with that experience. You treat people well, you set high expectations, and help them understand where they’re going.” Marketing professionals are often considered a breed all their own. They have to be creative, understand all aspects of the business, and face down the pressure of helping the credit union meet key goals, whether it be new loans, deposits, online usage, and the list goes on. Kim Sponem knows all about these things. She worked her way up the ranks to CEO from the marketing department. This happens from time to time in credit union land, but is certainly not common. “Marketing touches across the credit union. I knew that I wanted to either run a business as a president or start my own business some day. By being in marketing, I needed to understand the business side,” said Sponem. She says she was never the “creative-type” marketer, but more of an analytical marketer much more rooted in operations and in consumer research. Sponem’s CU career started shortly after graduating the University of Wisconsin with a degree in marketing. She soon joined CUES as a marketing assistant. “I was lucky in my career. I’ve had several mentors that helped me on the way. Very early it was Fred Johnson at CUES. Even though I was fairly low in the organization, he gave me chances. I can remember him taking me out to lunch talking about business and giving me an assignment to present some new ideas. It was clear to me, other people weren’t necessarily given those opportunities,” said Sponem. So she began to think about how marketing could help the business side. This would be expanded in her next job at Summit CU as marketing manager. She credits CEO Andy Faust for instilling in her the need to learn all about CU operations. “He taught me that if I wanted to move up I had to learn the business, be able to talk with the CFOs, speak their language,” said Sponem. Rather than taking marketing classes, she focused on ALM classes and financial management sessions at CU conferences, all with the CU’s blessing. She also worked with Diane Halvorsen who gave her an education on culture. “She taught me how to develop a culture to get things done through people,” said Sponem, who spent four years at Summit before joining CUNA CU as VP of marketing. It was here where Sponem really blossomed. Shortly after arriving, Mary Cunningham was brought in as the new CEO, and opportunity opened up. “She asked me to take over marketing and training. Then she asked me to take over strategic planning. In a couple of years it was HR, then operations,” said Sponem. The education was rapid but she embraced each new opportunity, eventually moving up to EVP and then CEO once Cunningham left. What did all these mentors and opportunities teach Sponem about rising to the CEO ranks. “I didn’t wait for people to give me permission about areas I had no direct impact on. You have to take the initiative. You can’t be a waffler. People will give you an opportunity, you need to take it. I’m a big believer that people who want to be mentored, go after those mentor relationships.” When Sponem was up for the CUNA CEO job, she wasn’t only one of the youngest candidates, she was also late into her pregnancy with her third child. She kept her sense of humor. “In my last interview, the search person said so what’s one of the first things you’ll do if you get the job. I said `go on maternity leave’.” Fast forward four years and Sponem is leading CUNA CU through probably its biggest metamorphosis. For one, she spearheaded a name change, which can be delicate ground when you’re talking about the primary CU for CUNA, CUNA Mutual Group and the World Council of CUs. The CU is now known as Great Wisconsin CU and Sponem has expansion on her mind. The CU has added five new locations during her tenure and Sponem hopes the new, less inclusive name, will attract more consumers in Wisconsin to the CU. Great Wisconsin has also opened a new 45,000 square foot office building and branch in an up and coming section of Madison. And all her focus on learning the financial side has paid off. For example, in this era of tight margins, Sponem said the CU’s spreads are actually widening because of a home equity program it started back a few years ago at prime minus one. As rates go up, the loans are repricing, helping its spreads. Sponem is a big believer in being politically active. She attends political events regularly and keeps in close contact with the league. She’s part of the Madison GAC task force, made up of local CEO and board members who keep their eyes on the political landscape. She credits her husband for allowing her to take on such a demanding job. He stays home part-time during the week to help take care of their three children. Her advice to new CEOs, “Get a lot of input into the vision of the credit union, but when you all walk out of the strategic meeting, make sure everyone understands where you’re going. If you have too many different ideas, and it doesn’t come to a conclusion, it can be tough.” Phil Buell – “The Builder” 37 years old Superior FCU Lima, Ohio Assets: $174 million Buell on politics: “The political side holds the key to the future. It’s key to being able to maintain our identity.” Phil Buell’s career started at a finance company straight out of the University of Toledo. He said that looking back on his tenure at American General it was a surprisingly more credit union-like start then people may think. “I worked on consumer lending and at the time we did a lot of small auto loans. It was very consumer oriented. I think what made us successful was the sense of urgency. We’d take an application over the phone and get an answer out in 30 minutes,” said Buell. That’s commonplace today but wasn’t so back in the early `90s when he started. He also learned the collection side of the business at American General, which would later be key for his credit union career which started at Employees Own FCU. “They didn’t have major delinquency problems, but there was things they could do better. We cut the delinquency in half by the time I left.” He worked his way up from lending manager to VP of Lending and eventually CEO. “The CEO resigned. She was only two weeks older than I was. It was good timing. We had a very young management team,” said Buell. Buell became CEO in 1997, a very interesting time for credit unions. “The whole AT&T case was happening. We were a SEG credit union and just opened up a new branch. I remember going to Washington to the GAC and Newt says he’s going to support 1151, and the next day the Supreme Court rules against us. With the court injunction, we had a brand new branch that we couldn’t open up to new members.” Buell recalls the flight home where he made a decision to open up the lines of communication with legislators. “I was thinking about our relationship with our legislature. We didn’t have one. We discussed this and said we’ll never get in this situation again, we want the legislature to know us.” He believes in building relationships first locally and carrying that over to legislature. “We get involved with local community projects going on, that helps us build those relationships with government.” Today Buell is CEO of Superior FCU. When he arrived two years ago it was $124 million, and today stands at $172 million. “We’re serving $250 million in mortgages. We’ve been able to grow loans and have what I call the triple double – double digit asset, share and capital growth.” Buell is very passionate about growing the business. “There’s complacency out there. We see some credit unions that are content. We must grow if we are going to bring value to our members. To remain viable over the long-term, we need to grow at a healthy clip,” said Buell talking not just about his CU, but all CUs. Buell said being a young CEO sometimes means sacrificing. With his career on track, he wants to focus on having a family. He landed his first CEO job at just 29 and said now he wants to slow down a bit. “My wife and I have no kids. She’s a physician’s assistant. We both realized it’s time to tap on the brakes and get a family going.”