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Economic Pace in Oklahoma Slows, First Family FCU CEO Says He's Not Overly Concerned
Friday, September 20, 2013 6:55 AM

For the first time in several years, the pace of economic growth in Oklahoma has slowed, according to an analysis by the Federal Reserve Bank of Kansas City. The quarterly review showed a dip in the energy, manufacturing and aerospace sectors, but the losses were more pronounced in rural areas compared to urban.

Chad Wilkerson, economist and Oklahoma City branch executive of the Federal Reserve Bank, tells The Journal Record that although the Sooner State’s employment growth has outpaced the nation’s in the last few years, payroll grew only 0.7 percent from July 2012. Oklahoma has the nation’s 11th-lowest unemployment rate, at 5.3 percent, according to the bank’s analysis.

While Oklahoma City and Tulsa areas steadily added jobs, rural areas reportedly saw employment fall. Slowdowns in the energy sector, manufacturing and government jobs are the primary reasons for lower employment in rural areas.

First Family FCU CEO David Dykes says he’s not overly concerned by the report.

“We are a low-income designated credit union, and the three counties we serve have a household income well below the U.S. median household income,” notes Dykes. “And the three counties we serve always tend to be in the top 15 counties with the highest unemployment, so this is pretty normal for us.”

According to Dykes, Native American tribes are big employers in the area.

“They’re good community neighbors. They’re very involved and do a lot for the community, including sponsoring local events such as rodeos,” says Dykes.

Dykes says the tribes have purchased a number of businesses, including gas stations, malls, a country club; even a rehabilitation center, and these businesses create job opportunities. In addition to the Native American tribes, the energy sector is still a significant employer, as well as a local gas bottling company. Additionally, Dykes says many of their residents commute to Tulsa for work.

“We just really don’t experience too many highs and lows in this area. If the country is doing great economically, we don’t necessarily see notable economic development. And by the same token, when the recession hit, it didn’t really impact us,” notes Dykes.

“Our members are of modest means, and many live paycheck to paycheck, so they are used to living on tighter budgets,” continues Dykes.

Even though First Family FCU serves a low-income demographic, they continue to experience steady loan growth.

“We’re running about 15 percent ahead this year compared to last year,” says Dykes. “For the last five years, we’ve had double-digit loan growth.”

Last month, Dykes said he was a little worried about liquidity because the credit union was 94 percent loaned out, and deposits weren’t keeping pace. To generate more deposits, Dykes said the credit union ran a promotion – a 2 percent CD special for one year, with a minimum of $500 and a maximum amount of $1,000. The promotion ran from Aug. 20 through Sept. 11.

“The theme of the promotion centered on Labor Day – you work hard for your money, so let your money work for you,” explains Dykes.

Dykes said the promotion worked really well, and even helped the credit union attract new members. Today, Dykes says the credit union is about 90 percent loaned out, and their loan portfolio is performing well, with a delinquency rate of less than 1 percent.

Serving a low-income demographic has its unique challenges, but Dykes says it’s something they’ve learned to deal with. The credit union, he says, has tailored their appropriately priced product and service mix to meet the needs of the community.

To motivate members to develop good savings habits, Dykes says the credit union comes up with clever campaigns such as last year’s “Change for Life” campaign. According to Dykes, the campaign was rolled out around tax season. A significant percentage of the credit union’s membership, he says, is eligible for the Earned Income Tax Credit (EITC). The credit union encouraged members to save whatever change they received in their income tax return. For example, if their return was $3,500.98, the credit union encouraged them to put at least 98 cents in a savings account.”

“We want our member’s to get in the habit of saving. Even if they’re only putting a small amount of change into a savings account, it’s the first step toward building a savings habit,” he says.

Banks have a strong presence in the counties First Family FCU serves, but according to Dykes, they’ve “ruffled the feathers” of some local bankers. While the credit union is able to compete on price, their biggest competitive advantage is service.

“My predecessor was huge on member service, and that is something I too believe strongly in.  We invest a great deal in educating and training our staff to treat members like the owners they are,” he says. “Borrowing on the words spoken by one of the presenters at the League’s Leadership Conference, it’s important to ‘treat members like they are a guest in your home’.”

At least one member of First Family FCU has gotten the message, as according to Dykes, he often comes to the credit union “just to hang out.”

“Some of our staff might be uncomfortable with the frequency in visits by this particular member, but I always stress the importance of treating our members well because it pays off,” adds Dykes.

First Family FCU has three branches, with 34 employees serving 11,000 members. The credit union is $50 million in assets.