News Column

Growth brings new presence

June 2, 2014

By Sherri Buri McDonald, The Register-Guard, Eugene, Ore.

June 02--Northwest Community Credit Union is going through a growth spurt, with both loans and deposits growing at a double-digit pace for the past several years, CEO John Iglesias said.

That growth will become more visible to the broader community at the end of the year when the credit union moves into a new $25 million headquarters -- Iglesias calls it a "support center" -- near the federal courthouse in downtown Eugene.

Iglesias, 48, grew up in Guam, a U.S. territory in the western Pacific, and said the first time he left the island was at age 18, when he joined the U.S. military and headed to boot camp.

He was a U.S. Naval officer for 28 years. Prior to moving to Eugene to head up Northwest Community Credit Union, Iglesias worked for several financial institutions in the Seattle area, including Salal Credit Union, Washington State Employees Credit Union, Boeing Employees Credit Union and Bank of America.

His native language is Chamorro and he speaks only a bit of Spanish, he said, which confounds those who assume he must be fluent because of his last name.

He earned a bachelor's of science degree in education from Southern Illinois University, and an MBA from Saint Martin's University in Lacey, Wash.

Iglesias lives in Eugene with his wife, Lani, and 13-year-old daughter, Trinity.

Question: Construction is underway at the credit union's new headquarters downtown. Can you give us some details about that project?

Answer: Sure, it's going to be a four-story support center location for us. We'll be moving our current operations here (in the Gateway area) to the downtown Eugene location, and all of the staff that's here will be located there except, maybe, for the branch staff. We're hoping that once we sell this building we'll be able to keep the branch location where it is for the convenience of our members.

The project will be approximately 67,000 square feet. We won't be occupying the entire footprint, however, we will be occupying a majority of it. There will be, hopefully, three retail vendors on the bottom floor. The one I think people are looking forward to the most is the coffee shop. And, we'll also have a support center branch -- what will probably become our main branch there at the support center location -- with a drive-up and a bike-up. I'm really excited about that. That's going to be unique and I think a fun thing for our members who love to bike. If our staff is any indication of how other Oregonians love to bike, they're going to use that heavily.

Question: What will it look like?

Answer: It will look a lot like our personality. We want it to reflect the Northwest, not at all institutional and not what you might expect from a typical financial institution. One of the criteria I had was that I wanted it to be warm and inviting to the community. I want it to be where people walking by and people driving by would look in, at night and during the day, and see things happening and see that there's a lot going on in the downtown. And we wanted to be a part of that renewal in the downtown market area -- "Return to the River," I think, is the term. Our community room will be transferred from this location to there. We'll continue with the practice of providing a free meeting location for events and for nonprofits to hold their meetings -- and even small businesses, in particular.

It will also be LEED certified. We feel that it's real important to Northwesterners that companies think about the environment, and we agree and we believe in that ourselves.

Question: Is your community room used quite a bit currently?

Answer: Yes, it's used for, boy, all sorts of training by our member business lending area. I believe it's being used also by the Springfield Chamber, by other organizations in the Springfield area, and by youth organizations. We do training. Oftentimes I come into work and I'll see people there, and when I leave work, they'll also be going in and using it after hours. That's my intention --I want it to be inviting even when we're not there with our regular operations, and I want it to be used at nighttime, whatever's convenient for non-profits and not-for-profit agencies in the downtown market area.

Question: How many employees does the credit union have now and are you planning to hire more as you move into the new space?

Answer: We have our full-time equivalent count at 250, I believe it is. In terms of bodies, we have about 275 people that work in our organization in both full-time and part-time status. We don't plan on hiring more people. One of the things that we've tried to do is to improve our operating expenses ratio and also our efficiencies. That's a big, big area of improvement that we want to make in the near future. Moving into that building will mean that we have the same number of people to start out with.

As we grow -- and we've been growing pretty quickly here -- I'm sure we'll be adding staff in the future. That location is going to be the hub for the organization. We see it as a support center, because we believe that we're there to serve our members and support our staff who serve our members directly and not be a headquarters. We follow that model very carefully.

Question: When do you hope to move in?

Answer: We'll be moving in at the end of this year, at the very latest the first week of the following year. We'll be moving in in phases -- I believe it's the second, third, fourth floor -- and then the first floor will be moving in last so we're not tracking all over their newly designed spaces. We're trying to do it in a logical fashion.

Question: So, you've touched on this a bit with your answers to the other questions, but what will the new location do for the credit union?

Answer: It will help us to be able to clearly communicate, in what we consider a hub location, who we are through the warmth of the way the building is designed, the way we have the community room open for the community even after hours, and also the little nods like the bike drive-up and the LEED certification. It will help, too, in a very real way, show proof of what we stand for and what we believe in, and that's serving our members. It will also help in redefining our brand more clearly for our members and even our employees, for that matter. We use this support center project as kind of the impetus for a lot of the changes we've been wanting to make anyway, and that is making our brand consistent in every market in which we serve.

As we've grown over the years and we've added new branches and we've merged with other organizations, there's been a little bit of customization in different markets. At the same time that we're doing this brand development work at the support center, we're going to be doing it at the branches as well. So, it will happen for the most part simultaneously in all of the 15 markets in which we serve and the, I think it's 12, counties in the state of Oregon.

Question: Can you give an example of how that would filter out to a branch?

Answer: Sure. In (some) branches, over the years, we have maybe let it go a little bit -- you know, it's kind of hard when it's so far away sometimes to remember that it needs upgrading, it needs a new paint job, it needs a refresh. What we're doing going forward is establishing a facilities maintenance plan that will make sure that whatever changes we make to clearly reflect our brand are represented throughout the network as well. So, whether you go to Roseburg or Redmond or Bend or the coast, you're going to be able to quickly see that that's a Northwest Community Credit Union location and identify our brand consistently. So, it's going to be in the merchandising, it's going to be in the paint colors, it's going to be in the design. We're rethinking and making everything as consistent as we can.

Question: Why is that important?

Answer: Well, it's like when you go to somebody's house and you can experience their personality and what's important to them and their family. We want our members to feel the same way when they come to our branches. They'll know what's important to us, and they'll see that members are more than just customers to us -- they're member owners. In some of our newer branches at the coast and in North Bend, we have teller pods rather than teller counters where the member stands on one side and the teller on the other side. It's more round, so you basically can come up beside the member and provide them with service. Initially, it causes a little bit of confusion but what we've found is people get used to it very quickly, and they like the personalized service. That situation is not going to be in every single branch, but it's just one example of how we're changing the way we do our business.

Question: You mentioned that you'll be selling this building (the credit union's current headquarters in the Gateway area). Do you have any leads, do you have any ideas of how difficult or easy that might be?

Answer: Yes. It's been challenging. I think, like everywhere else in the state, the (real estate) values are starting to return but not as quickly as we would like. We have had a lot of interested parties come through and talk to us, but right now we really don't have any definitive buyers secured. We do have a few people we've been talking to.

Question: Is there a date by which you want to have that settled?

Answer: Like yesterday maybe? We really hope that we'll have that wrapped up soon. We want to minimize our real estate holdings because that's not what we do. We want to put that money back to work with our members as quickly as we possibly can.

Question: Can you say anything more about the retail spaces on the ground floor? You mentioned a coffee shop. Have you lined somebody up?

Answer: We haven't lined up anybody else for those other retail spaces. We just want it to be something that could be useful and also fun to have down there, so we're not sure what it will end up being. But, we want it to be an active location with more than just banking going on. We want it to be a place where people can sit and have a cup of coffee. We'll have a really nice atrium in the building that hopefully the community will get to see many times with the various events occurring there. I'm going to have my Rotary Club come there for a visit and maybe even hold a meeting there or a luncheon. We'll have the Chamber's events and after hours types of things going on. A lot of the first floor is going to be glass on the 8th Avenue and Ferry Street side of the building and that glass will allow people to easily see into the first floor activity -- what's going on in the branch and what's going on in the community room and maybe in the retail spaces as well, so it'll be fun.

Question: I was down in that area, and the lot where Whole Foods is looking is pretty close by. What do you think about the possibility of having that in the neighborhood?

Answer: I'm thrilled. Jon Ruiz and I had breakfast this morning and we talked about that and we're just so excited about the opportunity for us to be co-located -- really important anchors in the community.

I'm (also) really looking forward to the designs and the plans that the city has for the riverfront. In the future that will be a destination point for people, not just to run errands and drive through. We want people to walk around downtown and provide them with as many reasons to do that as possible.

Question: What other businesses and services are nearby right now?

Answer: Well, right now there's the student housing projects that are going on. This week my board took a tour of the stage of construction that our new building is in. When we went up to the fourth floor to look at the type of views that we have there, we noticed that there were a lot of cranes up, and that is just cool. I get really excited that we're a part of that whole energy that's going into the downtown now and all of the great things that we've always known in Eugene could happen. It's starting to look like it's happening, you know? We're all very excited about that.

Question: Do you think that having your employees down there will help spur some other development?

Answer: Oh, absolutely. You know, we want to be a part of the community just like any other business, and we're going to encourage our staff to have lunch downtown. And when you've got a support center of nearly 200 employees, I think it's going to make a difference in the restaurants and, hopefully, the retail stores. I work out downtown, so I go down there all the time, and it will be nice to just be able to walk there and enjoy the services that downtown provides.

Question: What do you think that area near your new support center will be like say 10 or 20 years down the road?

Answer: Boy, I hope it will be very close to what the vision is for the, what do they call that, the Downtown Revitalization Plan, the Great Plan. I really hope that the restaurants will be in there. I'm a foodie and a wine connoisseur, and I just love those places where you can get out of your car and go walking around and have dinner, grab a glass of wine, enjoy the river and just make the most of what's best about our city. We'll be a part of that because of the great location that we have secured. And we plan on continuing to develop that, too. As we grow as an organization, we have, in our initial plans we showed the city, the potential to add more employees. And I don't see any reason why we wouldn't if we keep growing at the pace that we've been growing. We've been growing at double digits, which is very exciting.

Question: Over what time frame?

Answer: Over the last three to four years, we've been growing at double-digit pace in both loans and deposits. And, this year's not going to be any different.

Question: Is that primarily because of the acquisitions or is there something else going on?

Answer: It's actually been a combination of all of that. Coming out of the recession, our members have shown an appreciation for the fact that through the recession we helped them when others wouldn't. We continued to lend through the recessionary period, and after the recession, we have not slowed down. One of the things that a lot of people don't realize is that credit unions return a majority if not all of their deposits back into the community. We, right now, have a 98 percent loan-to-share ratio which means that we contribute the vast majority of our deposits back into the community in the form of loans at the best rates possible. Our members know that now, and they're starting to utilize us. We do a lot more (lending) than we've ever done before. We're doing member business lending now for small businesses, we're doing investments, we're doing mortgage lending, we have credit cards that have rewards attached to them for members. We have a 100 percent home equity product that will provide members with access to the equity in their property to be able to do the home improvements that they've been putting off because of the recession. And we've got home banking and mobile banking that we've rolled out last year. When we first started with that project, we had 2,000 members on it. Now, we have well over 30,000 members on our e-statements platform, so we're pretty thrilled about that. Mobile banking we're building up. I don't know where we are with that just yet.

Question: More business lending, investments, mortgage lending, credit cards with rewards -- when did all that come out?

Answer: We've been business lenders before many credit unions were in it. We saw an opportunity to serve a niche that fits our credit union model very well. We now do loans up to as much as $3 million. We have very low fees, and we've been developing products and services that fit the underserved communities in our markets. We were recently designated a low-income credit union, and what that means is we have a majority of our members in low-income designated ZIP codes. That's given us the ability to raise the level of lending in the member business lending area of our organization.

Question: Are there any projects in town that are relatively high profile that people would be aware of that your credit union helped finance?

Answer: The veteran's housing project; the Relief Nursery, that's an organization that we've been helping with as well -- we donated a van to them to help them with what they need. As far as business lending, there's a lot of companies that we've helped out -- it's a little too numerous to mention. You know, when credit unions can't lend the large dollar amount that some businesses need, we cooperate together, and that's, I think, one of the unique things about credit unions. As a not-for-profit cooperative, we don't hesitate to work together to provide the credit facilities that large businesses need, possibly, or medium-sized businesses need. Large businesses really are not our forte, but the small to medium business sizes are who we specialize in.

Question: How do you define small to medium in terms of revenues or employment?

Answer: I'm talking mom and pop sole proprietors all the way up to maybe as many as 50 employees. We definitely won't turn away a business that might have more employees than that, but that -- and loans less than $3 million -- is generally how we define small businesses.

Question: As you go through these changes, what are the biggest challenges you face?

Answer: Wow, one of the biggest challenges to all financial institutions is the burden that regulation has put on us and that continues to stress our organizations. We've had to dedicate staff to just monitoring and ensuring that we're complying with those regulations. I think, though, that the biggest challenges have to be in remaining as relevant as we can to our membership and providing them with those services that will not just be competitive but also customized to our members' needs.

Question: How many branches do you have in total?

Answer: We have 18 branches right now.

Question: Do you anticipate more acquisition?

Answer: Yes, I hope for more acquisitions. In the credit union world we really don't call them acquisitions as much as we call them mergers, because it's mutually decided upon and the other organization's members vote on that. We have one right now that we're talking to that hopefully we'll be able to announce in the near future.

Question: What is driving the trend of mergers in credit unions?

Answer: I think some of it has to do with the competitive environment. It's gotten very, very high paced and tough to compete when you don't have economies of scale. I think also regulation's been a challenge for these small credit unions. It's really difficult to comply with federal regulations that continue to pile up. Now that we have the CFPB (Consumer Finance Protection Bureau) as a third regulatory agency looking at credit unions and banks, there's a lot to pay attention to. Ignorance is not an excuse -- you can't say, "I didn't know that." Government doesn't work that way. I think it's primarily for those two reasons -- their ability to stay competitive and relevant and the regulatory requirements.

Question: How many members does the credit union have?

Answer: Right now, we have over 87,000 members and continue to grow pretty significantly every year, and we're really excited about that.

Question: What are the assets?

Answer: Assets are about $830 million.

Question: What's the bulk of the credit union's business at this time? Is it individuals or business?

Answer: Both. We're well diversified. One of the things I want to make sure we continue to do for the future and for today is to make sure that we are diversified. We have a really good mix of consumer loans, business loans and mortgage loans.

Question: Did you have to rein back on lending during the recession?

Answer: We didn't.

Question: How did you manage to do that when people were losing jobs and so forth?

Answer: That's a good question. What we did was we actually worked with our members very closely. One of the things I did when I first came on board was to rename our collections department the member solutions department. I felt that we needed to help members with their financial problems, not just collect money on a payment to make them current. We work with members to maintain a relationship, and we'll be with them through the toughest times in their lives and do everything in our power to help them to be successful in whatever wealth means to them. What our members did was they repaid us in loyalty. When they filed bankruptcy, many times -- we saw this over and over again -- they filed bankruptcy and they reaffirmed with us. They paid us when they weren't paying most others because they saw the value in a real relationship that they have with the credit union.

Question: How is Northwest Community Credit Union financing its building?

Answer: We've been using the earnings that we receive from our members. You know, one of the things that people don't realize is that what credit unions earn in terms of profits is returned back to the members. We are not borrowing the money at all -- we are paying for it outright through the deposits that our members make. We are returning it to our members in the best way that we can in terms of lower rates on loans and higher rates on deposits.

Question: Has the credit union been saving a long time toward the new building?

Answer: Oh yeah. Well, you know, what we've done, we have a capital ratio of over 9.5 percent, and that's strong for any financial institution and stronger than really what's expected by the regulators to be well capitalized. We don't do anything unless we can pay for it ourselves and not have to borrow the money in order to fund it.

Question: How did you get involved with credit unions professionally?

Answer: I was active duty in the Air Force during the Cold War and when the Cold War ended, I kind of ran out of a job. I was a Soviet intelligence analyst and there was no Soviet Union, so I kind of lost my job. I started doing other things -- I actually joined the Reserves. I retired from the Reserves in 2010 as a Naval intelligence officer. So, I stayed busy -- the threats didn't go away just because the Soviet Union collapsed. We had enough work to do in the intelligence service.

When I got off active duty in the Air Force in Tacoma, Wash., I went to work at a loan company and just really enjoyed financial services. To be honest with you, I did it primarily because I wanted to find out myself "What do I need to do to get a car loan? What do I need to do to build my family's future with mortgages and investments?" It kept leading me to opportunities within financial services. I worked for many years with Seafirst Bank, which eventually became (part of) Bank of America, and served as a branch manager, as a regional marketing manager.

Then, I made the leap when Bank of America was bought out by NationsBank and moved all their operations to the East Coast, I wanted to do more in the back office in leadership, and I found an opportunity to go work for Boeing Employees Credit Union up in Washington -- one of the largest credit unions in the country, the largest in the Northwest. I found an opportunity after that to work with Washington State Employees as their chief lending officer. I'd heard about this company down here in Eugene, Ore., where I never imagined I would live, but I have come to love and enjoy my life here. It has all of the benefits of a city but the feel of a small town community, and I love that about Eugene. My daughter enjoys it tremendously -- she fell in love with Eugene immediately as did I, and my wife has come to love it and now really enjoys working here at Keller Williams.

Question: Why have you chosen to work in credit unions rather than banks?

Answer: It's a completely different model. Credit unions are a not-for-profit financial cooperative. Our credit union, in 1949, was founded by six Weyerhaeuser employees. They put $50 in a lunch box and from that they were able to lend money to each other, and that's what the cooperative spirit is all about -- people helping people, human beings helping human beings, not corporations helping human beings.

Question: You mentioned this a little bit, but what's your educational background?

Answer: I have an associate's in intelligence through the Community College of the Air Force, a bachelor's in education through Southern Illinois University, a graduate certificate from Chapman University in human resources, a master's degree in business administration from St. Martin's University in Lacey, Wash., and a whole lot of other paperwork from different organizations.

Question: Did I see that you graduated from high school in Guam?

Answer: Yes.

Question: Are you from there?

Answer: Born and raised. I had never left Guam until I was 18 years old, and I enlisted in the United States Air Force.

My first flight off of Guam was to go to boot camp -- what a rude awakening that was!

Question: What were your parents' occupations?

Answer: My dad was a police officer on Guam; he also retired from the United States Navy. My mother was a dental hygienist, one of the smartest ladies I've ever met and one of the most caring and loving individuals as well. She really was my inspiration for continuing my education and always being there for my family. My family is a very patriotic family. My dad served through two wars -- the Korean and Vietnam wars. My parents were interned by the Japanese during their occupation of Guam and personally witnessed the liberation of Guam by the U.S. Marines. From then on, they instilled a very high level of patriotism in all of their seven boys. Four of us serve, or have served -- two are currently serving and will retire next year, and two of us retired within the last three years.

Question: Outside of work, what are your interests?

Answer: Where do I start -- there are so many fun things to do around here. I like to hike, I love the shooting sports, I love biking with my girls, as I like to call them. We've become really close with a lot of families at my daughter's school, and I do a lot of things now with a lot of ladies, a lot of little young ladies, with my wife. And we just really have a good time with the sports that (my daughter) is involved with. She's in volleyball, she plays several instruments and keeps us very, very busy. She loves to sing, loves to act. She blows our mind with how much talent she's got.

Question: I've got to ask, what's the connection between the credit union and biking? I've seen the bike-powered smoothie blender at community events. And, then, the bike lane.

Answer: We just think it's a fun way to give back to the community in a very small but cool way. We take (the blender) to a lot of events and I'll tell you people really appreciate getting a free smoothie because we don't charge for that. It's just because we do it out of love for our community.


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