June 2023

Chief Operating Officer James Petkewich, President & CEO Larissa Thurston, and FHLBank Boston Relationship Manager Savvas Kalaitzidis joined for a meeting.

Reconnecting With Purpose

Over the past year, St. Mary’s Credit Union has been focused on reconnecting post pandemic with its members, employees, and the communities they serve.

As part of its efforts to reconnect, it launched a new brand philosophy “At St. Mary’s Credit Union, We Set a Higher Standard for Banking: Yours,” recognizing the values that are important to its members and the importance of providing new and innovative products. One such product is an indirect auto leasing program that allows the credit union to leverage an existing local auto dealership network to offer consumers favorable auto loan rates and competitive auto lease financing options.

Based in Marlborough, Massachusetts, the credit union recently hit a noteworthy milestone, crossing the $1 billion asset threshold, and for the eighth consecutive year, was recognized by the Small Business Association as the Credit Union Lender of the Year in Massachusetts. President and CEO Larissa Thurston explains they continually win this award because “while many loans might be considered too small for the bigger banks in the area, they are a big deal to the family-owned small businesses who help support and serve our communities every day.”

The credit union is also proud of its charitable giving and civic engagement, distributing more than $200,000 to local nonprofits and committing more than 575 volunteer hours in 2022. Thurston, who became the first woman to lead the credit union in the fall of 2021, provided some additional insight about the credit union.

Member Q & A

Larissa Thurston
President & CEO
St. Mary’s Credit Union

What type of challenges and opportunities have emerged with the market volatility experienced in recent months? How is St. Mary’s Credit Union prepared to address these challenges?

Market volatility, managing margin compression, and preparing for a pending recession are focuses for us at St. Mary’s Credit Union (SMCU). We have had such a long period of economic expansion that was regularly referred to as ‘unprecedented,’ and it seems like we have been anticipating a recession for (at least) the past 5 years and preparing our balance sheet to withstand a period of steep economic decline. Many in management roles in the financial services industry may not have been in similar positions from 2007 to 2009 during the last recession. Likewise, much of the younger generation may not recall the impact of that recession. It is a priority at SMCU to provide financial education to our staff and our membership so they are prepared and in the best possible position they can be. Ongoing education and communication are key strategic focuses for us.

At SMCU, we have always had a low risk tolerance and historically this has allowed us to manage through economic downturns and to continue to lend to meet the needs of those in our community even when others could not. Over the past years, we have continued to focus on loan underwriting and holding the line on our loan-to-value ratios to mitigate the impact of a housing market bubble on our balance sheet. We know that with a low-risk appetite, we also have lower yielding assets which requires us to carefully model a variety of rate hikes and declines in our interest-rate risk modeling software to ensure we understand the impacts of our strategic decisions.

The recent bank failures have caused a wave of concerns to spread across the financial services industry. To most of us, these came as a shock due to the speed in which they occurred. Mobile and online banking channels were not prevalent during the last recessionary period so when we pictured a run on the bank, many envisioned lines outside of the bank reminiscent of “It’s A Wonderful Life.”

Over these recent months we have been able to actively market our fully insured status to high-net-worth depositors and to bring in additional new deposits and pay down higher cost borrowings. While margin compression is likely to continue, being able to lend at higher rates as the portfolio turns is key to future growth and success.

How is St. Mary’s Credit Union differentiating itself in the marketplace?

At SMCU, we know that there are many banking options available in our footprint, and we pride ourselves on being more than just a financial institution: we are also a trustworthy member of the communities we serve. As a not-for-profit organization, our purpose is not to take money from our members but actually provide a safe and secure place for them to keep and invest their assets. We value people over profit, customers instead of shareholders, and communities above corporations.

We provide our members with all with the banking tools they need, from online/mobile banking and bill pay to mobile deposits and free peer-to-peer payments to competitive deposit and lending rates. And every deposit is 100% insured, even beyond the NCUA $250,000 limit offered by most financial institutions.

Our employees are committed to providing members with a high level of service standards and believe in giving back to our communities through volunteerism and being active in civic and charitable organizations throughout our market area.

St. Mary’s Credit Union has used FHLBank Boston’s housing and community investment programs, including Equity Builder Program and Jobs for New England. Can you describe how your members have benefited from your use of these programs?

The Jobs for New England (JNE) program has been a great success and provides subsidized funding to us that we can then provide to businesses at rates significantly below prevailing market conditions. This allows us to help the smallest businesses employ more people as inexpensively as possible.

Since October 2016, we have provided more than 35 loans totaling $2.2 million to a range of small businesses in our community via the JNE program. These loans have supported both job retention and job creation in a variety of ways, with at least one job retained or created per $25,000 in financing. That’s 88 employees that have benefited from these loans!

The types of businesses that we have helped via the JNE program include: landscaping contractors; road work and asphalt paving contractors; site work and construction contractors; electricians; plumbers; carpenters; accounting and CPA firms; hair salons; painting and remodeling contractors; catering and food service companies; bridal and formal wear retailers; cleaning companies; and commercial flooring companies.

SMCU has also partnered with FHLBank Boston for the Equity Builder Program (EBP) for several years. Our members have benefited with the additional down payment and closing cost funds provided by the EBP grants, which increase the purchasing power for low-income first-time homebuyers, lower the mortgage amount and monthly payment, and increase borrower reserve funds.

Besides Jobs for New England and Equity Builder Program, what other FHLBank Boston products and programs has St. Mary’s Credit Union used?

In addition to JNE and EBP, SMCU has used the Housing Our Workforce (HOW) program. This program has provided down-payment assistance to our low- and moderate-income homebuyers, helping to increase the purchase power and reduce the mortgage amount with the increased down-payment funds from the grant.

Between FHLBank Boston’s EBP and HOW, over the past 5 years we have been able to provide 68 grants totaling over $1 million to empower these borrowers in our community.

Diversity, equity, and inclusion initiatives are gaining momentum at credit unions. What initiatives is St. Mary’s Credit Union undertaking or exploring?

SMCU embraces diversity, equity and inclusion with our employees, members, and our communities. By offering products, financial education, and programs like those with the support of FHLBank Boston, we provide access to, or a path to access, financial services.

Our employees are committed to our values of “partnership in our communities” and “teamwork in everything we do.” The credit union embraces philanthropic activities that help everyone, particularly the underserved, regardless of race, ethnicity, gender, mental or physical abilities, sexual orientation, age, or income.

SMCU’s employee base is incredibly diverse. 69% of SMCU’s employees identify as female, and 31% identify as male. In 2021, I was named as the first female president and CEO in SMCU’s history, and 67% of the senior management team are female. Over 20% of the employee base is minority, immigrant, or first-generation citizens. In addition, more than 20% of our employees speak more than one language. This diversity allows credit union staff to connect with and provide comfort and a sense of inclusion to members, prospective members, and fellow team members.