Bank Notes

Foothill Credit Union is a not-for-profit, member-owned financial institution that has served schools, hospitals, and businesses in California’s San Gabriel Valley since 1958. Foothill Credit Union has been a member of FHLBank San Francisco for over 14 years.

Relationship Manager Marc Young joined Foothill Credit Union Chief Financial Officer Jackie So for a conversation about Foothill’s mission of improving customers’ financial health, the institution’s strategies for persevering through the current economic cycle, and the value of Bank membership.

Q. How long have you been working in the financial services industry?

A. I have been working in a variety of roles across the financial services industry for the past 30 years. Prior to joining Foothill Credit Union, I held different roles with an investment brokerage, a real estate investment trust, a commercial real estate company, and a corporate credit union.

Q. Can you tell us about your organization and what differentiates it in the communities you serve?

A. Foothill Credit Union has been serving the healthcare and educational communities in the San Gabriel Valley since 1958. Over time, we’ve expanded this focus to serve various city municipal groups as well as other businesses in our community. Our mission is to improve our members’ financial health with excellent financial products and services. We customize financial products for different groups within our community, delivering ways to help them save and earn more money as they pursue their financial goals. We proudly rank as top tier in the Return of the Member (ROM) index (a propriety value score) in Callahan’s peer-to-peer analysis.  What differentiates us from others is our dedication and commitment to members’ financial well-being. Our goal is to help members reach their financial goals at different parts of their life journey. Our team actively participates in educational events, like “Bite of Reality,” and healthcare events like the “Walk for Hope,” in partnership with the City of Hope. In addition, our teams have conducted educational seminars for more than 3,000 Foothill members and students in our community. 

Q. What FHLBank San Francisco financial products and/or community programs does your member institution use to help meet the needs of your customers and communities?

A. Foothill actively uses FHLBank San Francisco’s daily and long-term advances. Daily advances help support operational liquidity, while long-term borrowing helps us mitigate interest rate risk. We also participate in the Community Investment Program discount advance credit program to fund mortgages for low-and moderate-income members.   

Q. Overall, how would you describe the value of FHLBank San Francisco membership to your organization?

 A. Foothill finds membership at FHLBank San Francisco extremely valuable. My team and I leverage the various professional development opportunities available through our membership, such as the Spring Seminars. At the annual member conference, the quality of the content, speakers and overall program is fantastic, and the opportunity to network with other banks and credit unions is very valuable. Our partnership with FHLBank provides additional financial strength and security while serving our members to achieve their financial goals.

Q. Given the current economic environment, what challenges and opportunities do you see for your customers heading into 2023? 

A. The rapid increase in interest rates in 2022 is unprecedented. Our members, like many consumers, are experiencing challenges with higher living expenses. As a result, we can see savings and checking account balance attrition as members use more of their savings to meet this increased cost burden. Given the inflationary challenges, we could see members pursue options like debt consolidation to lower their debt payments. We are continuing to invest in technology including the use of an AI decision engine that will improve efficiency, mitigate risk, and provide less friction for members during our loan application process. For members who want to improve their credit score, in 2023, Foothill will invest in a credit score solution, empowering our members to strengthen their credit with a savvy budget tool. 

Q. What steps do you suggest your fellow FHLank San Francisco members take to persevere through the current economic cycle?

A. In this rapidly rising rate environment, we need to be proactive in pricing both the asset and liability sides of the balance sheet. Managing interest rate risk will be a challenge for many financial institutions. It is always easier to increase deposit rates to benefit our members. However, delaying loan rate increases will negatively impact net interest margins. Members should also partner with FHLBank San Francisco to explore hedging options to mitigate interest rate risk.

We will likely experience a weaker economy next year as inflation continues to take a toll. To prepare for these challenges, members may want to review their underwriting guidelines and pricing strategies to mitigate potential credit losses. A credit score migration analysis provides a good trend to project future delinquency. Regarding liquidity risk, members need to stay vigilant, diligently tracking borrowing rates and capacity with regularity. Many pledged collateral values may deteriorate as interest rates increase. For members who have access to the Fed’s Discount Window, it is beneficial to test it regularly. With a volatile economic environment, members should remain flexible and move quickly when challenges occur. And lastly, don’t be afraid to explore different strategies to meet these new challenges.

Q. How is your organization navigating the dynamics of returning to the office, hybrid, and remote work?  Do you have any tips for fellow members?

A. After three years of fine-tuning the best way of returning to the office, Foothill has created a flexible working environment for team members. We have found that workplace arrangements are not a ‘one-size-fits-all’ and it really depends on the business need and the team member’s role. We continue to embrace a strong team culture and engage our team through both digital channels and in-person training, development, and fun activities. We do have a few business units that are remote, attending training and events occasionally. Most of our team is in the office with some workplace flexibility depending upon the work of the team. We remind our team that having fun and staying engaged with each other is a big part of the Foothill culture. While we support the use of Microsoft Teams and other digital tools, coming into the office as needed and deepening the relationship with each other makes our work and communication more effective. 

Q. Aside from your leadership role at your organization, what are you passionate about in your personal life?

A. Outside my busy work schedule, I enjoy playing a round of golf, especially when the weather is gorgeous. I also love to do karaoke and sing my heart out. Before the pandemic, travelling was also a passion of mine. My last trip was to the rainforest in Fiji, and in 2024 I’m excited to explore Costa Rica. Spending time with my friends and family is always enjoyable. Specifically, I love to volunteer at my daughter's high school. For community work, I serve on the Arcadia Rotary board, in the community our credit union serves, and support local schools and other businesses. 

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To contact Jackie So, email her at jso@foothillcu.org. To learn more about Foothill Credit Union, please visit www.foothillcu.org.   
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Editor's note to members: If you would like your institution to be featured in future editions of the FHLBank San Francisco Bank Notes newsletter, please contact your Relationship Manager.