NuVision Federal Credit Union is trying something new this year—its first brand update in a decade.
The Huntington Beach-based credit union changed its logo to add a touch of orange with the slogan, “For the Life You Build.” In March, it introduced the new brand at a swank event that included virtuoso comedic guitarist Mike Rayburn at the Hyatt Regency Resort in Huntington Beach.
“We hope the brand tells the marketplace that we have a more modern look, a crisper message,” said Chief Executive Roger Ballard from his third-floor office in Huntington Beach across the street from the Bella Terra shopping center.
The credit union is spending $500,000 on branding, which includes radio spots, a website upgrade and promotional events.
“It’s a pretty tame budget compared to what it could be,” Ballard said.
NuVision is trying to compete in the Southern California financial market, where marketing budgets can soar, such as Santa Ana-based Banc of California snapping up the $100 million naming rights to a new Los Angeles soccer stadium.
Compared to banks, credit unions are often considered sleepy cousins, known for sticking to car loans and home mortgages.
Ballard wants the business community to know that his credit union has beefed up its commercial lending staff and now provides loans from $1 million to as high as $6 million.
“We do get the sense that small businesses might not realize we offer commercial services,” he said. “There are a lot of businesses with a need for that size of lending.”
Its business lending almost doubled last year to $46.5 million from $25 million in 2015, focusing mostly on commercial real estate, like single-tenant buildings or apartment complexes. It’s not a large amount for Southern California, and commercial banks “won’t break a sweat” over the increased competition, Ballard said. It plans on lending $50 million this year to small businesses.
“We hope to blow through those numbers,” he said. “We’re able to make loans that don’t always meet this big box that some of the big lenders look for.”
Aviation Background
NuVision’s origins date to 1935, when it was founded as the Douglas Aircraft Company Federal Credit Union and grew along with Southern California’s aviation industry.
The decline of aviation manufacturing also shrank the credit union, which in 2002 changed its name to NuVision. By 2007, its membership had fallen to 51,832 from 67,385 in 2004.
Ballard, who grew up in Sacramento, was hired in December 2004. He was previously chief executive of Community Financial Federal Credit Union in Plymouth, Michigan. In 2004, the credit union reported $665 million in assets and no business loans.
Ballard began boosting membership through acquisitions and expansion into other industries. Rules on expansion have changed, as the credit union can simply add companies to its membership with a simple letter. Its members nowadays come from industries like housing, engineering, automotive and healthcare.
A big acquisition in 2009 was E1 Financial Credit Union, which added 25,000 members and $350 million in assets. Other acquisitions included Costa Mesa Federal Credit Union in 2009 with 2,500 members and Pacific Resources Credit Union in 2013 with 9,000 members. In April, it acquired Mission Hills-based American Federal Credit Union, which has 2,000 members.
In 2010, Ballard attempted to acquire Kinecta Federal Credit Union, which represented Hughes Aircraft employees. The combined entity would have assets of $4.7 billion and 40 branches in Southern California. But that acquisition fizzled because of an increased regulatory environment and California’s complicated merger rules.
Ballard said he’s open to acquisitions outside Southern California and noted investment bankers are coming by more often. California has more than 70 credit unions with assets from $500 million to $14 billion, according to S&P Global.
Solid Metrics
Today NuVision has 85,000 members and $1.5 billion in assets. Besides its headquarters in Huntington Beach, it has branches throughout Orange and Los Angeles counties as well as Mesa, Ariz. It is the second largest credit union based in OC after SchoolsFirst Federal Credit Union in Santa Ana with $12.4 billion in assets.
By metrics important to the credit union industry, NuVision is on solid ground. The credit union reported that 2016 net income climbed 25% to $9.9 million and net loans increased 14% to $1.06 billion.
Its net interest margin is 3.51%, above the 3.37% median of 52 of its California peers with similar amounts of assets, according to S&P Global statistics as of March 31. Its ratios for delinquent loans and returns on assets and equity are in line with industry averages. Its net worth to assets is 12.26%, well above the median of 10.18% and giving the credit union dry powder in case of problems.
Pumping Gas
NuVision’s biggest business is mortgages, followed by loans for used and new cars. Like others in the industry, Ballard said regulations in the past decade have hampered lending. He is hopeful the Donald Trump administration will ease the burden on lenders.
“There is a one-size regulatory scheme that is limiting us in our ability to fully serve the marketplace,” he said.
“We absolutely will be able to loan more money with reduced regulations.”
It is opening two offices in Fountain Valley and Costa Mesa and is also experimenting with ATMs connected to a live teller in another location.
To further boost its image, the staff—including Ballard—pumped gas for free for military veterans on Memorial Day at a Mobil Gas station in Huntington Beach.
Such marketing events are a good way to meet potential clients, Ballard said.
“We know banking isn’t the highest priority for our members,” he said. “We’re not looking for just the bang. We’re looking to build momentum. We’re looking to leverage what is working.”
