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VOL. 127 | NO. 221 | Monday, November 12, 2012


Treating Customers Well Top Priority for First South Financial


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Nice guys may finish last, but nice financial institutions grow steadily over time. First South Financial Credit Union stays competitive by reacting quickly and treating members well.

“I think for us there’s plenty of room for us to grow,” said Delynn Byars, senior vice president of marketing for First South. “When you look at surveys by the American Bankers Association, by Gallup, by other organizations, unfortunately there are a lot of financial institutions, but not a lot of them are doing a very good job taking care of their customers.”

Byars noted surveys in which major, nationwide banks scored poorly on questions like “How likely are you to recommend the bank to a friend?” First South’s scores have been 75 percent or more in the positive.

Part of that, she said, comes from a sense of membership that is innate in the credit union model.

Credit Unions are not-for-profit financial institutions, which typically are established to serve members of a particular field. First South was founded in 1957 as Navy Memphis Federal Credit Union to work with Navy personnel stationed in Millington.

Naval activities at bases across the country were realigned and so in the early 1990s First South expanded its membership.


“We had already been actively working to expand our reach beyond the base personnel,” Byars said. “We had quite a few companies that we worked with and still do to this day. We knew that the realignment was coming.

“A lot of credit unions did that much later on when community charters became available and then credit unions could serve an entire county.”

Credit unions are also structured so that account holders are part owners of the credit union, not just customers. First South offers in-house mortgage loans without fees or closing costs, and which are not sold off to other financial institutions.

First South does work with secondary lenders for customers who need different loan products, but Byars said they have vetted their partners carefully.

“We offer (those customers) the same level of service,” Byars said. “We’re always going to be sure that people get into the mortgage that’s the best fit for them, not what makes us or the loan officer the most money. We don’t compensate our lending officers that way.”

The result has been a steady flow of new mortgages in their pipeline, even through the last years of uncertainty in the housing market.

“It’s like the dam has broken, at least for us,” Byars said. “We’ve been putting our mortgage department through their paces for sure.

“We’ve also been lucky because we are a fairly conservative lender. We just didn’t have a ton of loans that we had to go through and rework when the recession hit.”

Currently, First South has a presence in 10 counties, six in West Tennessee, and four in North Mississippi. There are 13 branches in Shelby County, one of which is the financial service for the University of Memphis.

The campus branch, Byars said, is often the first bank account students ever have. To that end, First South has unveiled in the last month its Fresh Start Saver Loan, intended for people who need to develop credit or repair damaged credit.

The loans, usually about $2,000, are placed in a savings account and secured against the loan. Payments are made at a set rate for a 12-month term and the payments are reported to credit bureaus.

Currently, the credit union has $430 million in assets, 50,000 members and 105 employees. As yet, First South does not offer commercial loans, but Byars said that may change in 2013. They’ve also just launched a mobile app and plan to offer remote deposit capture and mobile access to bill pay within the next 60 to 90 days.

In its lifetime, First South has expanded five times by acquisition of other credit unions, most recently in September 2011, when it acquired Dyersburg Credit Union. Byars said First South is always looking for more opportunities to grow by acquisition.

First South has an all-volunteer board of directors, and senior management remains small and centrally located.

“We’re very quick and we’re very nimble,” Byars said. “Our senior management is here in one building. We can make a decision and go forward at a very rapid pace. That made us realize in early 2008, we were lucky that we’ve been able to react and make adjustments very quickly.”

And that has led to longevity both with members and employees alike.

In February, CEO Dr. W. Craig Esrael will become the third member of senior management to have a 30th anniversary with the credit union.

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