Cooperation Among Cooperatives: Stories From the Inside

Pat Connealy at the 2016 NACUSO Network Conference

Patrick Connealy at the 2016 NACUSO Network Conference

Each month we highlight at least one NACUSO member by interviewing one of their top executives. It’s an opportunity to tell their story in a casual and fun way. This month we sat down with Patrick Connealy.

PART ONE: Life Story and Experiences

What’s your current position and can you give me a brief overview of what it is you do in your work?

I’m the Executive Vice President of Commercial Banking for the National Cooperative Bank and I oversee nine Business Development officers that cover a variety of cooperative business segments nationwide.

What would you say most motivates you to do what you do? What are you most excited or passionate about?

I’ve been working with co-ops my whole life and have been with NCB for 30 years.  I started my career in the agriculture co-op banking business and spent seven years with them including three years with the Farm Credit Administration. I moved to NCB in 1986 when the bank was six years old. We fill the financing gap for co-ops that are not agricultural or electric co-ops.  I am most passionate about the long term customer relationships developed by NCB- some of which have been with us since 1980!

Tell me a little about your history. Where did you grow up and where did you go to school?

I grew up in Nebraska. I went to college at University of Nebraska. Go Huskers!

Who were your mentors along the way? People who deeply influenced who you are, what you believe in and what you’re committed to in your work and life? Tell me about them.

I would say my mentors are first and foremost my parents who taught me about hard work and also many teachers along the way including Mr. Ferguson, my high school history teacher.  I have also been very fortunate to work under several co-op “heroes”- Barry Silver, Chuck Snyder and Tom Condit who have all taught me a great deal.

Finally can you share something interesting about you that would surprise our readers? It can be anything, a hobby, an adventure, sports, the most embarrassing thing that’s ever happened to you,

I grew up in a very small town. My first 5 years of elementary school were in a two room country school. I had three other classmates and one was my twin brother. From an adventure standpoint. We do a lot of business with Alaska Native Corporations and I’ve been fortunate to experience the many remote regions of the state of Alaska.  I have been able to fish off the coast of Juneau and in one trip see every species of salmon, eagles, black bears, brown bears, a killer whale and a hump back whale.  

PART TWO: The CUSO Business Story

Tell me the story of how the NCB was created – the early days. Tell me about some of the memorable characters in the history, some that brought your story color, drama, comedy, conflict?

NEW_NCB_LogoNCB was created by an act of Congress on August 20, 1978 to address the financial needs of an underserved market niche – cooperative owned organizations that operate for the benefit of their members, not outside investors. In 1981 NCB was privatized and restructured as a cooperative and all capital stock is owned by borrowers or entities eligible to borrow from NCB.  Today we have over 3,100 commercial cooperative owners.

What makes NCB unique is that our customers are cooperatives-such as grocery wholesaler co-ops, food co-ops, purchasing co-ops, credit unions or housing co-ops. Other customers share in the spirit of cooperation, driven by democratic organizing principles. They may be Alaska and Native American enterprises, which by their very nature, are member-run and member-owned.  Others may be community health centers or charter schools, driven entirely by community needs. What they all have in common is a single fundamental principle – they have joined together cooperatively to meet personal, social, and/or business needs.

Everything we do has a mission that is consistent with the original purpose of the National Cooperative Bank.  As part of our enabling legislation, NCB also has an uncommon mandate to ensure our efforts benefit those most in need, supporting low and moderate income communities and cooperative development initiatives.  In 2015, NCB provided $290 million to our low and moderate income communities.

What were the key relationships that mattered most? What were the key sources of support or resistance you encountered?

Our story behind credit unions is interesting.  The original act of Congress that created NCB prohibited us from doing business with natural person CUs. So by default we focused on developing business relationships with Credit Union leagues and CUSOs.  Over the years we’ve had a number of CUSOs and leagues that have become members and shareholders of the bank.

Today, we are a depository institution and a correspondent bank option for credit unions.  We have a nationwide footprint. We provide the correspondent banking solutions for most of the Iowa credit unions. Between 35 and 40 percent of our deposits are from leagues, CUSOs and natural person credit unions. We have around 800 credit unions that are depositors of NCB – from $50K CDs to a dozen credit unions that have $20 million on deposit. We have a business to business banking model with 90% of the bank’s deposits generated from our cooperative housing, businesses and credit unions.   On the lending side we provide advisory lines to a number of credit unions as well as overdraft lines to our correspondent banking customers.  We also provide warehouse lines of credit to CUSOs

PART THREE: Reflections and Lessons

Finally, when you think of the future, what gives you hope and what makes you concerned?

When I think of the future of credit unions and cooperative banks, I think we are positioned well to succeed. People out there like the mission of credit unions and cooperatives and see the impact we make in community. We are all working together, to help communities thrive.

For credit unions, I do see the necessity for consolidation. But that scale is going to help drive their success – that’s where I’m optimistic. Where I think there is a road block not just for credit unions but for banks like NCB is the ongoing burden of regulatory compliance.