Thirty years ago, Jeff Kennedy landed his first job at what would eventually become Twin Star Credit Union, beginning as a part-time teller and loan processor in Centralia.
Kennedy, 52, today is president and chief executive of the operation. He became president in January 2011, then added chief executive in June 2012 after former longtime president and CEO, Marshall Ellison, retired. Ellison had held that position since 1996.
We met with Kennedy to ask him about his new role leading a $900 million credit union.
QUESTION: After you became president and CEO, what was your first order of business?
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ANSWER: To build an executive team that was smarter, brighter and more talented than I was. As far as the organization, the first job was to do nothing for about six months. I thought it was really important for the continuity of the organization not to come in and make wholesale changes.
Q: How did the credit union fair during the recession and how is it doing now?
A: We came through it really, really well. We saw growth in members, loans and deposits. We were approaching 10 percent unemployment in this county, but 90 percent were still gainfully employed and they really carried us. We didn’t have any risky investments that some of the banks had. We didn’t originate any subprime loans. We were more of the solution than the problem. When lending contracted, we stepped it up. We started doing commercial lending when commercial loans were not readily available in the market. We took our lumps and we had some losses but overall we came out of it really, really well.
Q: How about car loans?
A: Consumer lending slowed down because people were nervous about spending and their jobs. What helped us was the mortgage refinance business. We did a lot of mortgage lending; we didn’t put it in our portfolio, but we originated a lot so that helped us get through that period. Is the recession over? I think what we’re seeing is local improvement in consumer confidence. People are spending money again. Car loans picked up; they’re buying RVs, they’re buying homes, they’re building homes. People aren’t afraid to borrow anymore.
Q: Why did you decide to close branches in Renton and Longview?
A: The branch in Renton came as a result of a small merger, and we put some significant resources into it, but it’s a tough market to gain any foothold and to be successful there we would need at least three more branches and an investment of $7 million. That’s a lot to spend up front for a longer term return. We have success when we cluster branches and Renton was kind of an island. We had a similar situation in Longview. We’ve got three branches in Lewis County and branches in Clark County, but Cowlitz County is a tough market with two big credit unions: Fibre Federal and Red Canoe. We have opened up a branch in east Clark County, and we’re always looking at opportunities where members are, where they live and where we need to be.
Q: So what’s next for Twin Star?
A: The biggest challenge is in delivery of services and that’s where we’re spending our money. It’s all about mobile, tablets, Web-based services, delivering to our members what they want in the time frame that they expect and making it consistent. My dad is about to turn 80 and he is a paper guy. He wants to go into a branch, smell the coffee, eat the cookie and talk to the teller. And he wants to hand over a piece of paper and get a receipt. I also have a daughter who is in college and the thought of her going into a branch is about as absurd as it gets, because if you can’t do your banking on your phone in three seconds, there are about 150 other people that will offer that service and that’s where she wants to go. My dad’s generation is the biggest depositor group and my daughter’s generation is the biggest borrowing group, and the challenge is how do you serve them and those in the middle without alienating any one group? That’s the service question. How do you do that? I can’t force my dad to use the Internet because he doesn’t believe in it; I can’t force my daughter to go into a branch because she thinks that’s absurd. The people who are successful in that space are going to win.