ST. JOSEPH — United Federal Credit Union’s opening of two offices this summer in South Bend and Mishawaka follow the organization’s plan to build a broader presence in the northern Indiana market.
The two locations are among six full-service branches that the St. Joseph-based United Federal plans to open within two years in the South Bend area.
United Federal expects to open two more branches in South Bend and Mishawaka about this time next year, plus two more in 2020, said President and CEO Terry O’Rourke.
“We plan on it being a major market for us,” O’Rourke said. “The plan is really to develop South Bend and Mishawaka, St. Joseph County (Indiana), into another large market for us. By committing to six branches in the market and developing the partnerships we’re developing, our intent is to make it one of our main markets.”
United Federal Credit Union first entered the Indiana market in 2012 with the acquisition of Griffith Savings Bank in northwestern Indiana, near the state border with Illinois. Through the single office in Griffith, United Federal has members from South Bend who have been asking the credit union to open an office closer to them.
As South Bend goes through an economic resurgence, with a downtown revitalization and new nearby developments, United Federal decided to establish a physical branch presence in the market, O’Rourke said. The credit union was one of three lenders that provided $22.9 million in financing in 2017 to turn a former Studebaker plant on the south end of downtown into an innovation center with room for manufacturers, tech companies, business incubators, and training and education.
The new branch offices represent an investment of “several million” dollars for United Federal, which sees the South Bend area as an “expansion market” that it can grow into, he said.
“We feel to be successful in a market like South Bend, you need to have a branch presence,” O’Rourke said. “It’s a growing community and we’d like to be a partner in that growth.”
In one indicator of the market’s growth, bank deposits within the South Bend metropolitan statistical area grew 9 percent to $4.77 billion between June 2016 and June 2017, according to the FDIC.
As one of the largest credit unions based in Michigan, United Federal Credit Union has 32 offices in six states with 170,767 members and $2.67 billion in total assets as of June 30, an 11.5-percent increase from a year earlier, according to a quarterly financial report filed with federal regulators. More than 10,000 of the credit union’s members are in Indiana.
The six offices United Federal has planned for the South Bend-Mishawaka area are sufficient for the market, given the strong growth in digital banking that consumers increasingly have adopted, O’Rourke said. That trend has resulted in fewer people going into the branches for transactions.
The branches the credit union is developing are “a bit smaller” and have fewer employees who are cross-trained to take on more of a financial advisory role for members.
“We feel we’ll be able to cover the market effectively with a total of six, but if there’s a need for more, we’ll commit to more,” O’Rourke said. “We believe that in order to be successful in a market like South Bend, or any other market, we need to have a branch presence. Fewer branches, smaller branches, but nonetheless we see branches as very important.”
Expansion into markets in other states where United Federal has a presence “is definitely a possibility” and “always something that we’re evaluating” for the future, he said.
“We’re very fortunate to be in a lot of fast-growing markets,” said O’Rourke, citing Asheville, N.C. and northwest Arkansas. “Those are future possibilities for us, but right now we’re very focused on being successful in St. Joseph County.”