Small Montana Credit Union Plans Big Expansion

The $24.5 million Butte Community Federal Credit Union is one of Montana’s smallest financial cooperatives, but it is planning a big expansion.

The Butte-based rural credit union recently received approval from the NCUA to expand in Beaverhead, Madison, Deer Lodge, Powell and Jefferson counties, which will increase its potential field of membership by more than 81,000.

“We know we have to continue to grow to keep going, but we don’t want to become huge and lose that personal member service touch; we don’t ever want to lose that,” Karen Mandic, who has served as president/CEO of Butte Community, for 12 years, said. She joined the credit union nearly three decades ago as a teller.

Because Butte Community has only one branch, it has invested in digital banking. Of its 2,651 members, nearly 2,000 regularly use the credit union’s virtual branch and mobile app. The credit union plans to invest more resources into digital banking such as online applications for membership and remote deposit.

“Our biggest thing is providing convenience for our members,” Mandic said. In addition to digital banking, the credit union also offers members small dollar loans as low as $100.

There are no plans to open a new branch.

“We want to keep up with those younger millennials who want everyone online,” she said.

Montana’s median age is 37.5, younger than the national average of 38.2. Of the state’s one million residents, more than 438,000 are between the ages of 20 and 54.

Butte Community enlisted the professional assistance of CUCollaborate in Washington, D.C., which provides consulting services to help credit unions expand their field of membership with regulators.

“We’re just really excited we can reach out a little bit further,” Mandic said. “We are grateful for CUCollaborate to help us with this. CUCollaborate was able to answer any of the questions I had around the rural expansion. They worked with me and the NCUA to make sure our application was approved. I also want to thank [the Montana Credit Union League] for providing CUCollaborate’s consulting services as a benefit of our affiliation.”

Though Butte Community has seen membership growth of more than 7% in 2015 and range between 2% and nearly 3% from 2016 to 2018, its membership growth was less than 1% at the end of last year and fell to -1.20% at the end of the first quarter, according to NCUA financial performance reports.

Just as many other small credit unions are seeing across the nation, Butte Community has posted some highs and lows in loan growth over the last five years. The credit union recorded loan growth of more than 7% in 2015, but saw loan declines ranging from 1% to 7% in 2016, 2017 and 2018. Although the credit union saw loan growth of nearly 3% last year, it posted a drop in loans by -8.34% at the end of the first quarter, according to NCUA financial performance reports.

To compete against financial institutions that already serve consumers in the five counties, Butte Community is planning an online and broadcast radio campaign.

“Radio has been good to us,” she said. “Quite a few years ago, we decided to do our own radio ads with our voices.”

The ads are produced by two employees who have almost become local celebrities.

“It has been astounding how people received the radio ads,” Mandic said. “We’ve had members tell us they just love hearing them [employees] on the radio.”