2021: The Year in Review and Looking Forward

B: Hello members and business partners of Quorum. I’m Bruno Sementilli, current CEO of Quorum Federal Credit Union.

J: And I’m Jeff Pachter, President of Quorum. Because this is such a momentous year, we wanted to not only deliver our Annual Message together, but also, to interview each other, so that this gentleman doesn’t get away with downplaying some of his amazing accomplishments at Quorum.

Let’s get started!

J: As many of you already know--as the announcement was made earlier this year in June--Bruno, after 38 years with Quorum (starting as a loan clerk, and working his way up the company and throughout the company), has announced his retirement. Bruno, can you tell us why now?

B: Thanks Jeff. I think what’s most significant about “now” is that I feel Quorum is in a place where I’m comfortable retiring. Leading Quorum into the financial services company that we are today has been one of the greatest honors of my life, and I know the company is in great hands. I’m proud of the company we’ve built, humbled by the amazing people I’ve had the pleasure of working with, and pleased that the accomplishments we’ve achieved have helped to improve the lives of our members. The senior leadership team makes me proud every day, our Board of Directors, under Chairman Mark Werner, ensures we put our members and partners first, and stays laser-focused on our goals.

In addition, we continue to be a named one of the top credit unions in the U.S. by Bankrate, as well as a Best Company to Work For in New York (for 10 times over the past decade). We’ve launched value-added programs for our members, like our Member Discount Program, and Balance Financial Fitness, a free financial counseling service. We have a robust Learning Hub, with hundreds of free educational articles to help our members make good financial decisions. We now offer insurance and wealth management services through trusted partners. And we’ve changed our business model from branch-based service to a truly online credit union, serving members throughout the country through online and mobile banking and a nationwide ATM network. We’re also well on our way with a well-staffed lending business model and digital transformation.

So, I felt that the time was right to move on to other adventures, especially travelling the world with my wife. We recently celebrated 36 years of marriage and we’re both looking forward to seeing the world.

J: Take us back to your first day as a loan clerk, 38 years ago. What was Quorum like then?

B: Well, I remember starting work at what was General Foods headquarters (which is who we served at the time). At the time, before we evolved into an online credit union, Quorum had multiple service centers throughout the country at the many plant locations of our sponsors. We used to visit those locations in person to serve members. My service center was essentially a temporary office space that had walls but no ceiling, so everything was quite transparent. We were very small at the time but it was a good central location for members to find us.

When I started, we had approximately 10,000 members (today we have over 75,000), and there were about 20 employees (we now have over 150). We all wore many hats to pitch in where needed.

As a loan clerk, it was my job to help the Credit Union with all of the paperwork associated with a loan, like appraisal documents, credit reports and reviews for accuracy. Things were much different then, we didn’t have personal computers, and only had weekly print outs of member account information to work from.

J: What other hats did you wear at Quorum?

B: After being promoted to a loan officer, I quickly became a branch manager. That role gave me great insights into almost every department in the company. I held many positions in the company, mostly in lending but also Operations and even Marketing. I stayed with Quorum because it always created new opportunities for me. It was almost symbiotic - It seemed as I grew in knowledge and experience, the Credit Union had a new challenge for me. Ultimately in December of 2004, I was promoted from Senior Vice President to Chief Executive Officer.

As always, we had challenges as our sponsor was also evolving with a series of acquiring and divesting that threaten growth opportunities. I knew I wanted to lead Quorum to fulfill its vision and its mission of providing financial services to benefit the lives of our members. But I also knew we needed to create new opportunities to grow.

So that was my mission: to grow Quorum into a nationwide financial institution that benefitted the lives of its members, offered competitive rates, and was an institution where members could bank anytime and anywhere, but still receive the service you would expect to get at a neighborhood Credit Union.

And when you look at our products, like our HighQ Liquid Savings product, or our Term Accounts, which consistently have top-of-market rates, or our mortgages, particularly our HELOCs; I think we’ve really achieved that. When we hear “thank you” from a member, about how we helped them with their loan, or provided them great service on a phone call, or helped a longtime member set up a custodial account for their child, I think we’ve achieved that.

J: Your vision wasn’t without its challenges.

B: There were definitely challenges along the way and that’s what always keeps it fun and interesting. From economic upheavals to sponsor company actions to the taxi medallion portfolio of the last few years… we’ve had our fair share.

I think the common denominator for all of the obstacles we’ve faced over the years has been a dedication and resilience to overcome the obstacle, whatever it was at the moment.

We’ve been challenged along the way, yet never faltered in our resolve to do the right thing for members, partners, investors, and, our employees. And while I take pride in Quorum’s ability to look for creative and innovative solutions, it’s always been tempered by sound business practices, safe lending and secure investments, as well as building our capital reserves (what a member might call a ‘rainy day’ or ‘emergency fund’): those essentials have always seen us through.

J: You mentioned “growing the Credit Union.” As you said earlier, we’re a Select Employer Group-based credit union, serving employees at companies like Kraft Foods and Philip Morris. How do you grow a credit union when the base is limited to only companies you support as a credit union?

B: Right. Quorum has a way of combining practicality with innovation to create business models and strategies that differentiate us in the marketplace. Other credit unions were already exploring mergers and companies not yet served by credit unions, so we needed a different, more unique prospect to grow, which is why we started the Vacation Ownership Funding Company in 2009, the first of our Business-to-Business partnerships. And because we were so successful there, we went on to develop other partnerships like our international graduate student loans, medical loans, and most recently, and probably most successfully, HELOC and First Mortgage brokerage partnerships.

These partnerships really helped us to expand Quorum’s membership: those who became Quorum members due to Quorum financing their loan were then introduced to all that the Credit Union had to offer. But it also allowed us to grow financially, giving us the funds to invest in digital technology, transitioning our members from paper processes to online and mobile banking and ultimately a more seamless banking experience.

J: We can’t fail to mention the global pandemic.

B: Of course. I don’t think anyone wanted a year like 2020, or was ready for a pandemic, but Quorum had been making so many strides and investments toward serving our members digitally, that we didn’t experience the challenge so many credit unions experienced, who were scrambling to put an infrastructure in place that would allow employees to serve members remotely, and also allow employees to work remotely.

We had a solid “work from home” model in place, as well as a “bank anywhere, anytime” pledge to our members; so the transition, while unplanned, was relatively seamless.

When you take these moments, and these challenges, it’s honestly what I’m most proud of and it’s a major strength of the Credit Union. The ability to adjust and adapt to ever-changing circumstances. In a word, it’s Agility, which is one of Quorum’s Core values. The other value that I believe has grown and served the organizational well is entrepreneurship. Which means being adaptive and ready to re-invent yourself when conditions change. We did that so many times as we evolved from serving one company location to many, then serving many companies, changing from a branch to a branchless model, and growing membership through loan relationships.

And speaking of “re-inventing,” I think that’s my segue to interview you, where you can take us through what you have in store for Quorum!

J: Absolutely!

B: Well, first, as a reminder, the same time my retirement was announced, we announced my successor (gestures to Jeff; then faces camera). Jeff was a natural choice by our Board due to his proven performance with the Credit Union since 2014, his leadership, and his financial background, and it was a choice fully endorsed by me.

J: I’m honored to have the opportunity and am very grateful for the Board's confidence in me and I’m thankful that you brought me into Quorum 7 years ago!

B: What can you tell us about Quorum 2022 and beyond?

J: As I move into this position officially in February 2022, my focus is a commitment to all stakeholders: members, partners, investors and my colleagues.

The future of Quorum is seeing through much of the framework you’ve put in place for us: growing the Credit Union through business partnerships, transforming us from paper processes to digital solutions, and constantly finding ways to add value to our members and partners, whether through new services or products.

Many of our members and partners are aware of our tagline, “Banking That’s Good. For You.” What I love about this is that we’re operating with that very simple, but very profound adjective, at the heart of every business decision we make. Is this “Good” for our members, our partners, our employees, and the overall health of the Credit Union?

So we’re looking at pain points, and making progress towards providing a frictionless experience across all areas of business. And as you know, that’s no easy feat, but we have a great opportunity presented to us now in that members and partners expect companies (particularly financial institutions) to be digital.

Outlining a digital process takes hard work, it takes research, it takes feedback, and iterations, but we’ve already made quite a few improvements in online and mobile banking, our membership application, and in Member Service.

You mentioned earlier how we’ve changed our business model from branch-based service to an online credit union. Part of honoring that business model is looking for more ways for members to self serve, so members can truly bank on their terms. If they want us or need us, we’re here, but we’re giving them the tools they need to bank on their own. So, in addition to “must have” self-service like mobile deposits, which we’ve had for years and is very popular with our members, we’re making a lot of investments into other ways a member can bank on their own, like a 24/7 online knowledge-base and automated chat.

We have all the elements required to build upon our success: strong vision, mission and core values, talent, resources, and perseverance, and a cool tagline. As the incoming CEO, I can’t ask for a better foundation.

B: And what about new partnerships?

J: It was so important for the existence of the Credit Union to find new areas of business, which is why we started this venture in 2009 with the Vacation Ownership Funding Company, and went on to other partnerships. Our model allows us to rethink what Quorum could be, and how we can serve businesses as well as members, where everyone benefits. For example, in order for us to offer competitive dividends on our deposit products, and low interest rates on our loans, the credit union needs capital. We get capital through these partnerships. This relationship is an important area of the business that ensures our overall health and success and allows us to offer membership value.

Our partnerships with mortgage brokers throughout the country, in particular, has enabled Quorum to provide loans to so many new members which is exciting. In addition, it delivers income to Quorum which enables us to continually reinvest in our members including offering lower rates on mortgages and higher rates on our savings products.

B: Well, I know that no matter where my retirement takes me, I will continue to be a Quorum member and can’t wait to see what the future brings for the Credit Union. The company is well-positioned for future profitable growth and for taking care of our stakeholders-members, partners, investors and employees- and I have full confidence that you, as Quorum’s CEO, will continue to advance our success.” Thank you, Jeff, for your hard work, and for taking Quorum on what I know will be an exciting and rewarding journey!

J: An honor. Thank you.

B: And thank you members, partners, investors, Quorum employees, the Board and Supervisory Committee. It has been my absolute pleasure to serve you, and work with you, for 38 years.