TAMPA, Fla.—Some tough decisions made by one credit union’s board—including going against regulators’ requests and agreeing to put age limits in place and change its own make-up—are being credited by one CEO with helping it to weather tough times.
Indeed, Suncoast CEO Tom Dorety gives a great deal of credit to his credit union’s directors for the CU making it through the Great Recession.
Dorety said had it not been for some tough decisions, the $7.5-billion CU would not have gotten back on track financially as quickly as it did in a sand state riddled with loan defaults, foreclosures and job layoffs. Dorety also emphasized the board made changes to its structure years ago that led to the improvement of the team’s skills and perspectives, which produced astute decision making during the hard times.
Decisions Contrary To NCUA's Desires
Suncoast lost $76.6 million in 2008, $77 million in 2009 and $29.8 million the following year.
“We made it through the Great Recession, and we made it through for a number of reasons—one being the decisions we made,” said Dorety, who will retire from Suncoast at the end of 2016 after leading it for 20 years. “Our board of directors had to make some decisions that were contrary to what others wanted—regulators and other parties. They wanted us to focus on shrinking the organization. But we would not do that. The board chose to continue to move forward to grow and provide more and better services to our members and not cut this organization.”
Dorety said that decision to continue to meet members’ needs at current levels and to strive to improve made all the difference as the credit union began to get back on its feet.
“This way, when we did start to get better, we were able to get stronger very quickly and very effectively,” he said.
Suncoast Credit Union began to return to profitability in 2011, a time when sand state economies were still reeling. That year it reported $21.4 million in net income, followed by $70 million in 2012, $75 million in 2013, $88 million in 2014, and $72.9 million last year. Assets grew from $4.9 billion in 2011 to $6.9 at the end of 2015.
Noting that the board is important to the organization’s success at all times, Dorety added that when you “run into some difficult situations they are vital to your success.”
Agreed Upon Board Practice
Dorety pointed to some of the decisions the board has proactively made over the years to make sure the team is functioning well and is strong.
“They have an agreed upon practice—they don’t nominate any board member when a person gets past the age of 70,” said Dorety. “Historically we have been an education credit union, so the majority of our board maybe 10 years ago were retired educators. They took it upon themselves not only to put the age rule into place, but to also make themselves more diverse. From ethnicity, gender, age and professional background, our board is quite diverse and they represent all phases of our membership, which has changed in the last 10 years.”
Dorety fears that not enough credit union boards are taking these kinds of steps.
“I think an important matter credit unions going forward have to deal with is figuring out how to better represent their members and how to make decisions that enable the credit union to meet the needs of their members today and in the future,” said Dorety. “I am not suggesting you pay them, but as credit unions move forward and become more sophisticated and face more compliance issues, we have to have more boards looking at themselves and being honest in their self-assessments and making the right decisions on who represents the members. And a credit union that has all retired educators on its board is probably not representing their members effectively and not looking toward the future.”