Editor's note: This is a preview of a to-be-published case study.
Fort Randall Federal Credit Union is a $42.7 million credit union in Wagner, SD. It’s the size credit union many would assume will be gobbled up in a merger in less than 5 years.
But that’s not Ft. Randall.
The credit union has been working with CU Strategic Planning since 2021, when they applied for and received certification from the Community Development Financial Institutions Fund (CDFI Fund). The very year the credit union became certified, in early 2022, CU Strategic Planning helped guide the team to a successful Equitable Recovery Program (ERP) grant in the aftermath of COVID-19 for $3.7 million to boost lending in the hardest hit areas.
Over the last couple of years, Fort Randall has continued to work with CU Strategic Planning. In 2024, the CDFI earned the maximum technical assistance award from the CDFI Fund, $300,000. This award funded the hiring and training of a Native American financial specialist who is well-versed in the Native American financial structure. The credit union’s six-county service area has a far higher concentration of Native Americans than the US average.
Joe Brancucci, lending expert and head of our CU Results consulting arm, explained, “We collaboratively created a 5-year roadmap with Ft. Randall. Is it perfect? No. Is it intended to be thought-provoking? Yes. And they’re taking it very seriously.”
The roadmap CU Results provides is thorough. Some things included are as simple as revising and modernizing job descriptions, or they can be as complex as hiring and training a Native American financial specialist, someone who’s well-versed in the Native American financial structure.
What were the CU Results?
Leveraging the CDFI Fund ERP grant, lending at the credit union has soared, pushing other financial performance figures higher as well.
“They could use their CDFI ERP Fund grants to increase capital, so long as they lent in ERP-Eligible Geographies,” Joe said. These geographies are similar to the Target Markets that a CDFI serves: underserved and historically disadvantaged people in economically depressed areas. However, ERP grant funds focused on specific low- to moderate-income areas most severely affected by the COVID-19 pandemic.
And lend they did! Ft. Randall lent $2.5 million in its Target Market area alone. In total, the credit union made $13.5 million in loans in the 12 months ending in September 2024, compared to $10 million the previous year.
“Fort Randall’s delinquencies and charge-offs ticked up a bit, but nothing dramatic, in my opinion,” Brancucci noted.
| Fort Randall FCU | Size Peers | CDFI Peers |
Net Worth Ratio | 10.58% | 13.18% | 13.75% |
ROA | 2.43% | 0.68% | 0.56% |
Yield on Avg. Loans | 7.16% | 5.97% | 6.45% |
Loan to Share | 68.14% | 64.41% | 75.84% |
Share Growth | 8.38% | 1.65% | 1.67% |
Loan Growth | 14.68% | 0.01% | 2.08% |
Asset Growth | 7.63% | 1.96% | 2.12% |
Member Growth | 3.30% | -0.48% | -2.85% |
Data: Callahan & Associates as of Q4 2024
The CDFI credit union also recorded more than 9% membership growth in the last two years since winning the ERP funds versus a previous 5-year high of 3.5% in 2020. Net income as of Q4 2024 was $1 million compared to $258,558 at yearend 2023. Small as it is, Ft. Randall also offers business loans and mortgages. This ‘little engine that could’ proves smaller credit unions that understand their service area will always remain relevant to their members and community.
And as Fort Randall's CEO Julie Thomson says, "being a CDFI is not scary when you have experts for strategic planning and consulting."