VIRGINIA BEACH, Va. – One former credit union that became a bank has found out that the grass isn't necessarily that much greener with a bank charter, according to a story in the Virginian-Pilot. In 2003, the $90 million Bank @LANTEC Financial Federal Credit Union was coming off a sustained loss of members without any sign that it was particularly looking up, despite a shift in location designed to help it market itself to members. The former Atlantic Fleet Federal Credit Union had changed its name from the Hampton Roads Port Employees Federal Credit Union in 1993. At that time it changed its focus to try to service the military personnel that served in the Atlantic Fleet Headquarters, the ships of the fleet based in Norfolk, Virginia and the employees who work in the Virginia Port Authority. But changes in deployments, combined with a market which was growing rapidly more competitive meant that the CU was having trouble growing and the credit union saw its membership roles slide to just over 14,000 from just above 21,000 in a little over three years. So the CU made the switch to becoming a mutual savings bank, Bank @tlantic, in the process of easing out of the competitive auto lending market where it was having trouble competing, and into real estate and business lending. Here the former CU has found a measure of success but at the cost of having to adopt a more advanced data processing system and doing community outreach to try to bring in the small business loans that the bank needs, the story said. Currently, Bank @tlantic is trying to carve itself a niche in the small business lending market by cultivating borrowers with annual sales of between $2 million and $5 million. It hasn't all been a steady progress upward however. The paper reported the bank posted a $277,000 loss in the first half of 2004, but posted a more than $500,000 profit for the quarter ending Sept. 30, the paper said. Significantly, Bank @tlantic is not one of the former credit unions to have formed a mutual holding company and offer stock in an initial public offering. Susan Ralston, former CEO of the credit union and now CEO of the bank, did not reveal why the bank had refrained from taking that step but said only that it was not in the CU's three-year plan. -

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