Mark goes 1-on-1 with Erie FCU CEO Brian Waugaman on various topics in and out of the credit union space. What's it like to live in Erie? How did he navigate becoming CEO after a long tenure at the credit union? What's working and what needs work today? What is Brian's crystal ball on the future? All this and more as Mark Ritter and Brian chat it up. 

IN THIS EPISODE:

• [1:32] Brian shares his career journey, and he arrived at Erie FCU
• [4:56] The history of Erie FCU and managing the business around Erie’s winter conditions
• [10:33] Brian discusses working his way through the organization and the importance of community
• [16:45] Brian talks about the process of becoming CDFI certification and his hopes to provide funding for small business owners
• [21:32] Brian discusses how to drive commerce, get involved in the community and market CDs to benefit members
• [27:50] What is the future of the credit union space 

KEY TAKEAWAYS: 

• When promoted within a company, success hinges on building trust and fostering cooperation with colleagues. Clear communication, defined responsibilities, and accountability are essential. Stay focused on the organization's vision and mission to lead effectively.
• Erie FCU refined its vision and mission to focus on becoming the most trusted financial resource in the region and delivering responsible financial solutions that meet community needs. These guiding principles shape the credit union's daily efforts and long-term success.
• Erie FCU sees technology and innovation as key future drivers. While member satisfaction has declined compared to larger banking competitors, the credit union recognizes the need to adapt to evolving technological expectations, similar to the "Amazon effect," to stay competitive and meet member needs.

RESOURCE LINKS

Mark Ritter - Website

Mark Ritter - LinkedIn

Brian Waugaman - Linkedin

Erie FCU - Website

BIOGRAPHY: 

Brian Waugaman is a longtime veteran of Erie FCU and has been its CEO for the last ten years. He is well-rounded in his credit union skills and touched virtually all aspects of the institution during his tenure. Erie FCU is a CDFI focused on the communities in northwest PA.

Mark Ritter: Hello, everyone. This is Mark Ritter, your host of Credit Union Conversations Podcast. CEO of MBFS, we're a business lending headquartered in Pennsylvania with clients and staff spread all around the country. I hope you'll consider us for your business lending support at your credit union. It's really been an incredible 2024 as we've put on more new clients this year.

Who's the ceo of erie federal credit union brian. How you doing today?

Brian Waugaman - CEO of Erie FCU: Hey, Mark, I'm doing good. And, uh, thanks for that. Thanks for the nice, uh, opening there. I, so me being on the board means you're going to make me look good on this one. So I leave, I leave it in your, in your hands, sir.

Mark Ritter: Absolutely nothing but softballs today.

Brian Waugaman - CEO of Erie FCU: Yeah, so, um, I was born and raised in Franklin, Pennsylvania, so I'm from northwest Pennsylvania. Uh, we have a population there about 12, 000 people. Um, my, my dad was an accountant and a controller for a manufacturer.

Uh, they manufactured fall protection equipment and my mother was the front desk manager of a holiday inn. And a bank teller, which I always think is interesting, because when you take those two, um, career paths and you join them together, somehow you get a CEO, uh, who's in local financial and deep rooted in member service and experience, obviously from the other side.

Federal credit union was one of my clients. Um, I had about 75, uh, local networks that I worked on. Um, and I always said to myself, you know, If the credit union had an opening, I think I would take it. Well, I just happened to get done doing all their year 2000 upgrades. And the CEO at the time, Norb Kazmarek, he pulled me in my, in his office.

So I'm just rounding out a full 10 [00:04:00] years here. And, um, it's been one heck of a ride, I will say that. And along the way, I've met a lot of great people, including yourself, Mark, worked with a lot of very talented and experienced individuals. And I, uh, I consider myself very fortunate to be in the position where I am.

Mark Ritter: Now, being a small town, Pennsylvania guy as well, when you moved to Erie, it must've felt like you were moving to, uh, Pittsburgh or Philadelphia.

Brian Waugaman - CEO of Erie FCU: Um. It, you know, it did mark, but at the same time it didn't. And let me explain that a little bit. I had grandparents, they would bring us up here when we were kids and we would stay, uh, we would come up here and camp on the shores of Lake Erie.

So, Lake Erie was sort of a, I don't want to say a vacation type spot, but that's why we came up here. We came up here to have fun. So, it didn't seem as far away.

Mark Ritter: That's good. So, what about the profile at Erie today? Tell people a little bit about what Erie Federal Credit Union looks like.

Brian Waugaman - CEO of Erie FCU: Yeah. So, uh, Erie Federal.

Um, we dropped the school employees piece and we went to Erie Federal and then in 2008, we got our community charter. So then we were allowed to serve those who live, work, worship, or attend school in Erie or Crawford County, which is the county just south of us. Um, Area overall, we've we've taken on quite a few mergers over the years.

We're at 216. Um, our membership has increased by 60%. We're approaching 80, 000 members. We've tripled our loan portfolio, um, with some help from MBFS. Thank you very much. And we doubled our deposit portfolio and our loan to share ratio. Uh, Um, as when I took over, we were about 45%. So we were pretty darn liquid.

We had, we had plenty of money to make loans. We're now up to about 68 percent and consistently looking to grow that, um, for obvious reasons, but, um, but yeah, that's, that's a little history right now. We're at 813 million in assets. And like I say, just about, uh, Approaching 80, 000 members.

Mark Ritter: So this is a show for, with credit union industry listeners.

Um, yeah, you're

Brian Waugaman - CEO of Erie FCU: right. We're known for it being cold here. Um, but I will say here, he has so much to offer. Uh, we have all the seasons obviously, but because of that, there's, you can go from the lake. Um, you can go out fishing, you can do skiing. There's tons of stuff to do there. We have a beautiful lake front.

I mean, I wasn't that far. And I remember we used to get snow six, eight inches. Okay. The first year I was here. I was in my apartment, I was looking outside, I was watching television, the snow started coming down. And lo and behold, I took a, I took a slight nap. I think it was about an hour and a half and I woke up and I couldn't see the apartment building below because about two feet of snow had dumped on us in that short period of time.

Great. And, uh, again, skiing as well. But when you come to Erie, if you're renting a car and you're between the months of probably, we'll [00:09:00] say December and March, uh, make sure you pick up an all wheel drive or four wheel drive. That way, that way you'll be able to get around with no problem.

Mark Ritter: Absolutely. When I lived in the Philadelphia area, if we had six inches of snow, that was multiple days off for the kids at school.

That's just another day up in Erie.

Brian Waugaman - CEO of Erie FCU: That's just another day. You, you go to school. In fact, In fact, you know, it's very rare even that we see, uh, late starts to school. I mean, it, it really, it's just, it just happens. We have the plow trucks, we have the equipment and, and we make it happen. I suppose it's like anybody you talk to, no matter where they live in the country, they're going to say, you just do, right?

You just, you just do.

At one point, you were just Brian, the coworker in the I. T. guy who we said, Hey, my computer's broke and we're there. And then took over the corner office. So what was that transition like for you being that you didn't come in as the CEO?

Brian Waugaman - CEO of Erie FCU: It's a, that, that's an interesting question, Mark. Um, yeah. So any advice, uh, be careful what you wish for it.

No, I'm, I'm kidding. The CEO, this, it's been a great spot. And like I said, being able to see the credit union grow and continue to thrive has been fantastic. But, um, for me personally, I, I think. What I look back on is, you know, immediately you, you hope you made the right impression and impact with those around you.

Um, so I think that's very important. Obviously having that trust, having that rapport. I mean, when you grow up here, I hate to say that, but kind of grown up here, I've been 26 years now, you grow up in an organization, you, you become part of that culture, you, you work with those people day in and day out.

um trying to build build that consent, um in an attempt to understand You know where each area felt their respective areas needed to be directed I wanted their insight because You know, when you're, when you're building an organization, it's very important that you have those around you on board. Um, and I think we did that very well.

They were very open, very candid. Um, so was I. And then from that point forward, we, we got down to business. Um, we continue to have very open communications. Um, we have very clear responsibilities, again, trying to hold everybody accountable. We hold each other accountable for the things and, um, and we're Very heavily on the vision and mission.

We went over the fact that we really didn't have a vision. Statement and our mission statement was lengthy and we were able to tailor those two things down. And from that point forward, we've done very well. So the vision, obviously we just want to be the number one, most trusted financial resource in the region.

That's it. We want to be trusted. And then the mission is obviously all credit unions are want to do this, but we want to responsibly deliver financial solutions that meet the needs of our community. Um, those are our two guiding lights and, and being a credit union, that's what we attempt to uphold each and every day.

So I just think really, really being You know, uh, a meaningful impact helps so much in that you were a piece of that before you got the job. So it was probably, hopefully made it a little bit easier and develop that trust factor.

Um, in Erie, you'll hear a lot of people say we're a big, small town. We cover a pretty wide area, but people know everyone. Um, so it's very important for us. We, we do a lot of relationship building. And, um, as I said earlier, you know, we've had a lot of help along the way. Uh, again, working with partners like MBFS, First Heritage is another one that we work with, MortgageQ.

So we've gained a lot of, uh, experience from them and we've learned a lot along the way. And then we continue to adapt as, as all credit unions do. You continue to adapt to the environment, the, uh, the competitive forces that are out there. And again, like I always say, too, we just came out of strategic planning.

Mark Ritter: So shifting gears a little bit, you recently became a CDFI, Certified Development Financial Institution. So I know you haven't with just becoming a recent Pop up at the credit union. You haven't seen the impact yet but Tell to advise some others who may be considering that because a lot of people have been considering it recently Tell to give people the good bad and ugly of that process Along with maybe how you plan to use that in the future.

And a few years back, we started working with a facilitator that we had come in. He gave us some information on some, uh, an organization that assists credit unions in becoming CDFI certified. They do a lot of the legwork by gathering all the data from you and then they move forward with getting that certification.

So that really helped us. One of the things that was important to us when we read about everything about CDFI and what it could provide for us was in particular for us, it may allow us to maybe lend a little deeper within our community. Then what we had been able to do prior, um, case in point for us. Um, and as you well know, Mark, we're, we're deep into a business and commercial lending here.

They're leaving you behind. Well, that leaves a nice spot for Erie Federal. But what we found is there was a small contingent of those businesses that were right on the cusp. Boy, we would really like to get you over this and get you the funding you need, but we can't make it happen. We can't make that happen yet.

And those. That's very important to us. And again, we knew there was a small contingent there that wasn't being helped. And we figured, you know, we can get this. We can, we can provide that. So we're looking forward to it. We're hoping to hear here, um, in the fall. Um, hopefully we, we did have a grant. Um, application submitted and we're hoping to hear back here in the fall.

So

Mark Ritter: one of the reasons I'm excited for it is one of my pet peeves in the banking industry is people that just will look at it and say, Oh, we're going to go into Cleveland. Uh, I like this market. I see this area. We're going to keep this in the Cleveland. Uh, yeah, maybe we'll skip over and we'll be in this city.

Um, and we have had the conversation where Erie is a very stable economy. And during the great recession, you kind of moved along and it was, you know, it didn't have the massive upswings or downswings. And You've maintained a stable credit union in, I guess what is sometimes called the Rust Belt of, of, uh, America.

Versus, you know, if you're in, Uh, Miami, Florida, and there's nonstop construction in Nashville, Tennessee, where there's 20 cranes. You know, what's your advice to those credit unions in, uh, in an area like Erie?

Brian Waugaman - CEO of Erie FCU: Hey, Mark, that's, that's an excellent question. Um, I, I think I told you earlier too, we, we really dig deep to build relationships.

Um, we do that for two reasons. Obviously, when you're working with vendors and whatnot, you want to make, you want to hold them accountable, make sure they're honest. But at the same time, it allows us to learn and I think we do that very well in the community. Um, I don't, you know, when you look at Erie, there's, there is, there's so much going on here.

Um, myself, I sit on the, uh, board of the Erie Chamber, which is very, um, It's a very good place to be because you get to hear the needs and whatnot that's going on within your community. And from that, you can bring that back to the credit union and have those discussions. So, again, I think having those relationships and being involved in your community is big.

It is amazing. And you know, this you're very, you're very well spoken, but when you talk to people, you get to learn a lot. And I think when you take that information and look at it from a community perspective, there's a lot more there than people might expect. So yeah, my, my biggest, my biggest takeaway there would be to definitely be involved, get involved.

Mark Ritter: You know, Brian, I sometimes hear, you know, we all have to be conscious of costs. We all have to be conscious of processing. We want great experiences. I don't believe relationship building Is an automated process for any time soon. Uh, and, and, and relationships matter, particularly if you're going to be in your community and nobody's automating the people are automating products.

They're not automating relationships. And I think you guys do a really good job at it.

You're right. They have not automated the process of human interaction. Um, I think sitting down face to face, being in someone's face and talking with them, it, it, it leads to a great deal of, uh, additional insight.

Mark Ritter: So from an overall picture, um, you know, it's been kind of a crazy two years, uh, going into the higher interest rate environment, uh, the liquidity marketplaces, which didn't impact you.

Um, was much, you know, what's been working well for Erie lately? What, what's, what's, what's hitting for you? Uh, if we're talking this

That's really where we're at. We have a very strong indirect lending department as it is, um, as far as mortgage area. That one's been a little more flat again, just a lack of inventory and whatnot. But over the last year back in 2023, because you mentioned a little bit about liquidity there. Back in 2023, actually, we'll say the summer of 22, we had an explosive, massive, uh, growth in auto lending.

And we came out with a, it was a 5 percent nine month CD. Um, it was new money only we offer jumbo, super jumbo rates on that. And we launched that in [00:26:00] February, February 1st, by May, we were shutting that promotion down because we brought in 90 million. And that's at a time when everybody was looking at us saying, where are we going to get, where are we going to get deposits?

They're out there and we found it. Now again, did we have to play quite aggressive? We did, and it's been interesting what we've done since that time, because after nine months we had to look at our internal processes. We had to look at how our certificates flow and how those deposits and funds were gonna flow.

Because what we wanted to do was maintain those funds. For the additional lending as we move forward, but at the same time, we wanted to soften those cost of funds. So we came in pretty aggressive. We stayed fairly aggressive so that when those 9 months started to roll off, they were rolling into a 12 month.

Checking out. We got other loans. We've got, you know, bring your direct deposit here. So, um, that worked out very well for us through our last year. Like I say, and we're, we're still running with those funds because we're still looking at it and saying, well, geez, now they're getting ready to go into their third certificate with us.

What are we going to do to hold them here? Um, so it's been a lot of fun. It's been a lot of fun working on that.

Mark Ritter: So you're a, you're great at strategic planning. So what's your advice to other credit unions that you talk to what, how, where their mindset should be, let's say the next one, two, three years, uh, where do you think the industry's moving and what's, uh, going to be the hot buttons and what you keeps you up?

So,

Um, I know we just, again, coming out of strategic planning, the overall satisfaction with credit union members, as opposed to our banking, um, uh, competitors that has that satisfaction level has dropped over time. And I think a lot of that is because of the technology that a lot of those bigger pockets can offer.

And I turned all the lights off in the room. It was pitch black. And I said, you know what we need? And I said, everybody and [00:29:00] I said, what everybody to turn their flashlights on. Well, those flashlights are shooting all over the room. Okay. And then I said, everybody, I want you to aim that to the red dot on the front wall.

And all those lights all came together. So very dramatic all came together. And when they all came together in 1 spot, I clicked that slide and up came focus and it was just flashing. And since we've done that. Yeah. Everybody remembers that and it's something that we take very seriously each year we go into strategic planning.

We're like, what are we focusing on? What are we going to do this year and coming out of that? We come out with about three strategic pillars and then we move forward with operations plan and budget that supports that. So, yeah, strategic planning. I could go on for hours on this mark. So, So don't let me, don't let me keep going here.

Mark Ritter: All right. We could talk for hours and people would stop listening. Yes, they

Brian Waugaman - CEO of Erie FCU: would. We don't want to do that. We don't

Mark Ritter: want

Brian Waugaman - CEO of Erie FCU: to do

We'll put his, uh, we'll put his, uh, information and profile out there in the show notes. So Brian, it was great talking. I, I, I knew this was going to be a good one and I have a, hopefully other people picked up some notes. So thank you for coming.

Brian Waugaman - CEO of Erie FCU: And Mark, thank you for the opportunity. This was a lot of fun.

I'll, I'll admit, I was a little nervous going into this. This is the first time. So this was a lot of fun. I think I could go another half hour. So good stuff. I like it, Mark.

Mark Ritter: Well, you'll have to play it when you, with your family, uh, wife, when you're in the car and, you know, tell all your friends, so I'll do that again, Mark.

Thank you. And thank you for

Brian Waugaman - CEO of Erie FCU: everything you do and for what you're doing for the industry. Really appreciate it.

So thank you for joining us and we will talk to you soon.

Narrator: Thank you for listening to the Credit Union Conversations Podcast. Have a question? Visit MarkRitter. com for more information.