Growing up on a dairy farm in North Dakota, Steve Schmitz learned the value of hard work and perseverance at an early age.
These traits would prove invaluable as he led $1 billion asset First Community Credit Union in Jamestown, N.D., through near failure in the early 2000s—first as branch manager, then as vice president of lending, and later in his current role as CEO.
“We were on life support from NCUA,” Schmitz says. “NCUA replaced the entire senior staff and gave us three months to make it better. I was asked to head up the loan department just two years into my time at the credit union. That was baptism by fire.”
As First Community’s loan delinquencies climbed to 3.5% and its net worth ratio fell to 6%, Schmitz’s team stemmed the bleeding with a renewed focus on loan policies, collections, member communications, and staffing.
“Big numbers can make you numb,” he says. “We were dealing with a lot of seven-digit agricultural loans, so a $150,000 charge-off didn’t seem that big at the time. We reinforced to staff that while a loan might not be big or that profitable, we had to be 99.5% sure the member would pay us back.
“Most of the loans that went bad involved borrowers who were either dishonest or had an agenda that wasn’t in the credit union’s best interests.”
First Community has since grown more than five times in size, and Schmitz credits staff’s dedication for the eventual turnaround.
“Our employees are loyal to the credit union and want it to succeed,” he says. “They aren’t here just to collect a paycheck.”
This experience has had a lasting effect on Schmitz’s approach to leadership.
“Surround yourself with excellent staff,” he says. “If you don’t have a strong executive team, you won’t succeed. You don’t need to be the smartest person in the room, you just need to have the smartest people in the room working with you.
“Get people who complement each other and who challenge you—it’s OK if they push back. When you surround yourself with good people, good things happen.”
Fostering a positive, inclusive culture is another top priority. “I like to know the staff—what their interests are, who their kids are, and what they’re doing. I want them to know I’m approachable and that they can poke their head in my office and talk to me.
“I love talking to people—it’s probably my favorite part of the job.”
“He’s engaged, too, whether it’s with crazy antics and dances for our marketing videos or volunteering to judge on our Scholarship Foundation Board,” says Katie Nehl, First Community’s communications manager. “Our positive culture and making staff feel valued, challenged, and trusted comes from the top.”