NGFCU through the years
A small group of employees of the Northrop Aircraft Company applied for permission to organize and operate a credit union. On August 29, 1946, the Northrop Aircraft Credit Union was officially chartered and opened for business. The newly organized credit union's philosophy to provide a safe place to save and offer loans at fair rates became the cornerstone of solid financial stability in subsequent years.
Walter Gage, Personnel Manager for Northrop Aircraft Company and one of the original incorporators of Northrop Aircraft Credit Union, was appointed general manager. With a staff of four, Gage started the long journey of providing needed financial services to Northrop employees and their families.
On February 3, 1959, the Credit Union changed its name to Northrop Credit Union to reflect its mission to serve all Northrop employees. By 1964, 63.4% of Northrop's 11,899 employees were members.
In November, Walter Gage, the Credit Union’s general manager for 17 years, passed away. Mary Delaney, one of the first women in Northrop's Management Club, was appointed general manager on December 1, 1965.
August 1976 marked the retirement of Mary Delaney. During her eleven-year leadership, the credit union grew from $3.5 million in assets to over $40 million in assets with 28 full-time employees serving 18,621 members. Marv Peiffer was appointed the Credit Union's third general manager in August 1976. New branch facilities were opened at the Aircraft Division's Technical Center in Hawthorne, at the West Complex location in El Segundo and at the Defense Systems Division in Rolling Meadows, Illinois.
A new multi-service credit union headquarters facility was dedicated at the Hawthorne Airport Administrative Building. During this period of expansion and growth, the asset size of the organization doubled.
In 1980, the credit union introduced the Share Draft and Direct Deposit programs as membership increased to 30,868.
The Credit Union's former president and CEO, Stan Swenson, was hired as its fourth General Manager on May 24, 1982. That year also marked the introduction of the Individual Retirement Account and Money Market Savings Account.
Deregulation of the financial services industry and the dynamic growth of Northrop Corporation saw the Credit Union's assets rise from $87.8 million to $186.8 million over a four-year period. Membership increased from 35,500 to a record high of nearly 47,000 in 1987. Loans outstanding increased from $52.8 million to $136.3 million and reserves grew to $12.9 million.
By 1985, during its 40th year of service, the Credit Union's assets reached $100 million. Only 11 years beforehand, its assets were just over $20 million.
At the close of 1991, the Credit Union's 45th anniversary year, assets surpassed the $200 million mark, closing at $211.8 million.
In 1992, Northrop Employees Federal Credit Union ended the year at a record assets high of $233.5 million.
Responding to member requests, Flight Plan Financial Services, Inc., a wholly owned Credit Union subsidiary, was incorporated to offer investment and insurance products. On June 8th, Northrop Grumman dedicated the opening of its 26,000 square foot main office and headquarters at the Electronics Systems Division in Hawthorne, California. By joining the CU Service Centers and CU Deposit Network, the Credit Union added another 116 deposit locations.
In 1993, the Credit Union expanded service to Northrop employees in Norwood, Massachusetts. During September 1995, the Credit Union expanded services by opening a branch at a newly acquired site in Lake Charles, Louisiana. 1997 marked the opening of a new branch to serve employees at the St. Augustine, Florida, site. The Credit Union's growth was marked by assets in excess of $265 million as of April 1998.
The Credit Union merged with two credit unions in the Washington, D.C./Baltimore area. With this merger, Northrop Grumman Federal Credit Union inherited an expanded field of membership as well as five new branches.
Following a rigorous test and acceptance period, NGFCU launched its online banking service to members all over the nation. NGFCU also merged with the Metro Employees Federal Credit Union, further expanding the field of membership to include Los Angeles County Metropolitan Transportation Authority (MTA) employees. NGFCU also acquired a new branch in the heart of downtown Los Angeles. By the end of 2001, Northrop Grumman FCU assets had grown to more than $362 million with a diverse membership of over 50,000 nationally.
Shares grew at record levels as investors pulled money out of an uncertain stock market with a heightened appreciation for the security offered by NGFCU’s insured savings. Loans and assets grew as borrowers enjoyed the expanded buying power of extremely low interest rates for both consumer and real estate loans. Finally, as Northrop Grumman Corporation expanded its influence into every region of the United States, the Credit Union was busy implementing service solutions to a varied and geographically disbursed membership base. NGFCU finished 2002 with $396 million in assets with a membership base exceeding 55,000.
Through its wholly-owned subsidiary, Flight Plan Financial Services, Inc., NGFCU implemented new dental and vision coverage aimed to serve the special needs of retirees. A new branch was opened in McLean, Virginia, to serve the growing population of NGFCU members in that area. During the last half of 2003, a special low fixed rate auto loan promotion provided nearly 1,000 members with more than $16 million in funding for new and used vehicles. With record low real estate rates, NGFCU provided over $96 million in real estate loans to members to refinance or purchase homes. The year ended with over 58,000 members and assets up 17.3 percent from the previous year in excess of $466 million.
NGFCU members funded nearly 2,000 low interest rate auto loans totaling $36.25 million. A new branch office and ATM went into operation to serve the employees at Northrop Grumman's F-35 Building in El Segundo, California. With the assistance of its wholly-owned subsidiary, Flight Plan Financial Services, Inc., NGFCU made available an array of voluntary insurance options to Northrop Grumman employees in the Space Technology and Mission Systems sectors and to NGC retirees. The online banking service expanded to over 16,000 users managing their NGFCU accounts online, with over 2,300 using the convenient and free bill payer feature. The year ended with assets of $523 million, a 12% increase over 2003.
As a reflection of member confidence, NGFCU continued a pattern of steady growth, finishing the year with $570 million dollars in assets with more than 40% of Credit Union income returned to members in the form of dividends on savings. Improvements were implemented to remote access channels providing members with more services and better accessibility. In addition to improved online banking, NGFCU also implemented online consumer loan origination to complement the addition of online mortgage loan origination that had been added in 2005. NGFCU also began offering an easy, convenient and secure method of "taking ownership" with the implementation of online membership origination and account funding.
With assets over 600 million dollars by the close of 2007, NGFCU continued a steady pattern of growth in assets, loans and shares. A clear demonstration of member confidence and the value of Credit Union membership was seen in the 34% growth in regular term (CD) account balances and a 17.5% increase in IRA term account balances. NGFCU introduced the popular fixed rate HELOC program, strategically increased term account rates, and continued to offer an array of low-cost auto loan options.
NGFCU members faced many of the same challenges brought on by the economic downturn that created concerns for most Americans. With stock values dropping and savings rates falling in 2008, it became more difficult to find a worthwhile return on investment without sacrificing security. NGFCU members had one advantage over the rest of the population in that their savings and loans at NGFCU were unsullied by the failings suffered by other financial institutions. NGFCU continued to provide an above-market return on savings while maintaining affordable loan interest rates and terms. To support member efforts to securely build wealth, the Credit Union offered among the highest savings rates in the country. Demonstrating continued member confidence in the value of NGFCU membership, term (CD) account balances increased by 10% and IRA term account balances increased by 19%, while assets expanded by 14% to nearly $685 million by the close of 2008.
NGFCU continued to provide members with extraordinary benefits in an economic environment that caused many other financial service organizations to struggle. Because of its strong capital position and conservative lending policies, NGFCU demonstrated it was better prepared to deal with the turmoil in the financial sector than most other institutions. In fact, during these difficult times, NGFCU was able to offer among the most competitive savings rates and low interest loan rates anywhere in the financial services industry. This accounts for the nearly 13% growth in assets, 21% growth in savings and 9% growth in loans. Even during these difficult economic conditions, NGFCU deployed significant resources to offer more service across a broader area of the Northrop Grumman Corporation landscape and for Los Angeles Metro employees including several new state-of-the-art deposit accepting ATMs. In the fall of 2009, a new free-standing branch was opened nearer the NGC Site 4 location in Palmdale, California.
While 2010 was a challenging year for many businesses in the financial services industry due to the turbulent economy, NGFCU sustained its trend of vibrant growth trajectories. By the end of 2010, the appeal of attractive dividend rates resulted in member savings growing by 12%, closing the year at $750.5 million. Prudent member borrowing patterns, concerns with the general economy, difficulties within the auto sales market, the continued slow pace of home sales, and a general aversion to accumulating more debt, resulted in loans to members dropping a modest 1% to $418.5 million. The net result of all this financial activity ended in assets growing by 10% to close the year at $850.7 million. Notwithstanding the persistent economic challenges, NGFCU proudly continued its judicious expansion of new service outlets for members across the NGC landscape. A major contributor to the Credit Union's product success during 2010 was the NGFCU credit card offering a trusted alternative to competing credit card programs.
Closing the year at $767.8 million in total share balances, members continued to recognize the value, security and long-term advantages of keeping their money safely deposited in an NGFCU savings program. The somewhat cautious but steady loan origination encouraged by some of the lowest loan rates in decades resulted in loans increasing to $420.3 million dollars in loans outstanding. The net result ended in assets growing by a respectable 1.2% to close the year at $879.2 million. Contributing to NGFCU’s stability was member access to our extremely low interest rates on home loans and auto loans while experiencing very low delinquency and charge-off ratios. During the year, NGFCU also expanded dedicated education and outreach throughout the Northrop Grumman and Metro landscapes.
Closing the year at $798 million in total share balances, a 4% annual growth, even though rates were at an all-time low, showed that saving was still a very real priority to NGFCU members. In stark contrast to the unwavering appeal of saving to our members was the $427.5 million in loans to members that saw modest growth of 1.7% during the year. As NGFCU continued to expand its presence across the NGC and Metro landscapes, new technologies to enhance accessibility for members “on the go” were implemented in 2012, including the ability for members to remotely and securely deposit checks using their Android phones and iPhones.
For NGFCU, 2013 saw a change in focus towards more consumer lending. There was an impressive gain of $26.5 million in consumer loans granted compared to 2012. The total loans granted balance of $167.7 million was the best ever recorded by NGFCU. Not surprisingly, but equally impressive is the fact the loans granted per member ratio also reached record levels for the Credit Union. Credit card balances were up 59%, reaching a record high of $36.1 million. As a point of reference, revolving credit balances in the entire U.S. grew only a little over 1% in 2013. There was a sharp rebound of NGFCU new vehicle loan balances, which grew 48% in 2013. Used vehicle balances grew at almost twice the rate seen in 2012. At $61.5 million, NGFCU’s used vehicle loan portfolio reached record levels. The credit union also saw an increase in membership that was at the highest rate since 2004. On the deposit side of the ledger, regular share balances grew by 7.9%, share draft balances grew by 5.8% and money market account balances grew by 3.4%. Total deposit balances grew by 2.9% overall, to $821.1 million. NGFCU’s average fees paid per member remained about half that of the 2013 U.S. credit union average.
With continued slow but steady improvements in the economy—aided by the benefits of increased consumer and business spending, a stronger housing market and lower fuel costs—NGFCU was able to achieve the following:
- Investment income per member at almost five times the national average
- Fee income per member at about half the national average
- Gross income growth of 12%, more than three times the national rate
- Net income growth of 31%, four times the national rate
- Non-interest expense to income ratio less than the national average
- Term Deposits up almost 8% in total balances, while the credit union industry declined by more than 1%
- Real estate and new vehicle loan balances grew faster than national averages
NGFCU achieved the following all-time record highs:
- $1.013 billion in assets
- $895.4 million in share deposits
- $471.8 million in loan balances
- $119.0 million in total capital reserves
Achieving $1 billion in assets placed NGFCU in the top 4% of the nation’s 6,147 credit unions as of December 31, 2015. On an asset-per-member basis, NGFCU ranked in the top 2%. While the Credit Union entered a new asset category, it continued to rank very high in those metrics that reflect product value and member trust.
Here is how NGFCU ranked among all the nation’s credit unions as of December 31, 2015:
- Top 1% with the lowest vehicle loan rates
- Top 10% with the highest money market rates
- Top 2% with the highest average term account balances
- Top 10% with the highest average balance for checking accounts
- Top 0.5% with the highest average credit card balances
NGFCU expanded service to 12 states, with 23 branches and 42 ATMs, most at our members’ work locations. Besides having convenient work location branches and ATMs, our Business Development Team made nearly 400 visits to 29 outlying work sites in 2015.
This focus on specific employee group needs resulted in balance increases in our checking (+17%), credit cards (+9%) and home equity loans (+9%) that were significantly higher than national rates in 2015.
Entering its 70th anniversary year, NGFCU seized the opportunity to expand its focus on member service. Our growth in 2016 mirrored our nationwide presence, with new ATMs in Sunnyvale, California, and Huntsville, Alabama. We added new branches in Southern California at El Segundo (ES 4) and Space Park (S building and R6 building cafeterias) where offices were expanded to allow for real time deposits and loans. Members in Melbourne, Florida, benefited from a rebuilt branch in the 221 building to offer greater member confidentiality while maintaining convenience.
In its second full year of implementation, NGFCU’s modern data processing system allowed the Credit Union to offer a more progressive array of products and services built on a state-of-the-art platform. The system allowed NGFCU to offer the newest remote service technologies, including Apple Pay®, Android Pay and Samsung Pay, to meet the ever evolving member demands for convenience. Additionally, NGFCU made the strategic decision to increase its staffing levels to further improve person-to-person member service, in the branches and by phone.
Throughout 2018, Northrop Grumman Federal Credit Union continued to expand and improve service to its growing membership. In 2018, your Credit Union’s assets grew an additional $35 million as thousands of new members sought to share the value of NGFCU products and services.
The continued growth in member participation and engagement has produced some outstanding achievements reflected in these benchmarks posted at the end of 2018:
- $1.139 billion of assets, ranked in the 94th percentile of United States credit unions
- $720.1 million of loans, an increase of nearly $95 million
- $983.5 million of total shares
- $214.6 million of loans granted
Contributing to these accomplishments were improvements in remote service delivery channels as member suggestions encouraged the addition of new technologies to enhance the member experience.
DocuSign and credit card funding during the onboarding of new members, and secure messaging of documentation were added in 2018. Additionally, the mobile banking app began offering easy login through Quick Access to set up Quick Balances, to update member contact information, place stop payments, create account nicknames, and view multiple accounts from the convenience of one mobile device.
NGFCU welcomed a net of 7,253 new members during 2019. This was the largest annual increase in membership in the Credit Union’s 73-year history. All other Credit Union accomplishments for this year stood on the shoulders of this historic membership expansion. While the nation’s credit unions saw overall balance on loans granted increase 7.7%*, NGFCU’s balance on loans granted grew 29.4%, almost 4 times faster. The 11,254 loans granted in the amount of $288.4 million was an all-time record for NGFCU. Our Debt Consolidation Loan with an annual percentage rate as low as 5.99% helped almost twice the national average proportion of our members acquire a non-credit card unsecured loan (23.1% vs 11.8%, respectively).
Additionally, NGFCU opened two new branch locations within NGC sites: Chandler, Arizona and Palmdale, California. This brought the total number of NGFCU branches to 23 locations, at or near sponsor company sites in seven states. In 2019, NGFCU made home ownership attainable for a larger number of members by lowering the down payment requirement for members purchasing their first home to 3%. And to better measure and improve our member service, the Credit Union updated to a digital survey platform.
* Source: National Credit Union Administration, December 2019 Call Reports