PCU transition not seen hindering growth

CREDIT DUE: George J. Charette III, left, CEO of Pawtucket Credit Union, speaks with Antonia Melo, assistant branch manager and Brian McMahon, assistant vice president of commercial lending. / PBN PHOTO/ MICHAEL SALERNO
CREDIT DUE: George J. Charette III, left, CEO of Pawtucket Credit Union, speaks with Antonia Melo, assistant branch manager and Brian McMahon, assistant vice president of commercial lending. / PBN PHOTO/ MICHAEL SALERNO

When Karl A. Kozak joined Pawtucket Credit Union as its president and CEO in 1991 it had $120 million in assets, a single branch and 29 employees. He retired last month and handed the torch to George J. Charette III, who will head a very different institution than Kozak found 24 years ago.

PCU today is the largest credit union in Rhode Island with $1.7 billion in assets, 15 branches and more than 250 employees, signaling growth that Charette says he’d like to continue.

“It’s definitely big shoes to fill,” Charette said of Kozak. “I certainly want to see Pawtucket Credit Union continue to be successful and continue to grow.”

Kozak spoke with Providence Business News a week after his final day, saying he was already enjoying retirement. He points to PCU’s growth as something he can hang his hat on but equally, if not more important to him, is the working environment PCU was able to foster, he said.

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“We’ve created a wonderful place for people to have a great career and that meant as much to me as the bottom line, if not more,” Kozak said.

Kozak and Charette met in 1978 while working for separate financial institutions in New Bedford. Charette, a Providence College graduate, worked with the New Bedford Institution for Savings and joined Fleet Financial Group after an acquisition.

Kozak approached Charette shortly after he took over at PCU, telling him he’d be interested in Charette joining the credit union at some point as its chief financial officer, which happened in 1996.

“Karl is certainly a dynamic leader,” Charette said. “We have a very good, progressive board here who have been putting people in the right places.”

Looking forward, Charette says he would like to continue the strategic planning process that Kozak, the management team and the board have put in place, which includes growing loan and deposits along with any additional products and services that the marketplace demands.

“We never look at anything outlandish, everything is pretty much measured,” Charette said.

Taking deliberate action based on strategic planning is one recipe that PCU has followed since Kozak came on, he says.

“I guess that we went one year at a time and we just never really stopped or looked back,” Kozak said. “We were fortunate to be growing and moving and there wasn’t one unprofitable year.”

Kozak said he and the board decided some time ago that Charette would be groomed to succeed him, saying his guidance as PCU’s chief financial officer and again when he was promoted to executive vice president was instrumental in the growth of the credit union, Kozak said.

“George has helped me in my own personal success and the credit union’s success,” Kozak said. “This is who we thought would be the first person to take over because he’s well-respected and beloved. He’s already hit the ground running.”

Looking back, Kozak says volatile economic conditions locally and globally have been challenging over the years. But the biggest challenge, he says, has been the increasingly intense regulatory environment that began in the early 2000s that has forced PCU, and other financial institutions, to spend a lot of time and resources on compliance.

“It’s put some smaller institutions out of business,” Kozak said. “But you’ve got to deal with it.”

Charette is watching to see how an expected rise in federal interest rates, which have hovered around zero since the economic crisis of 2008, will be managed. The Federal Reserve has indicated it could approve an increase to benchmark rates in the second half of this year.

He says the move, whenever it comes, could have a major impact on loan growth, which he says is one of PCU’s most successful areas, especially on the business-lending side.

“If it’s a fairly measured, slow increase in rates, that should be good for the majority of credit institutions,” Charette said. “The only caveat is that they have been so low for so long that borrowers are not used to [higher rates]. We’re curious as to whether there will be a chilling effect on borrowers.”

Charette also looks forward to being out in the community more and talking with the credit union’s members. He’s spent a lot of time up until now working and presenting in a financial capacity, but is now excited by the prospect of working with members in his new leadership role.

Kozak will continue in an advisory role on the board of directors, or, as he puts it, “watching at 30,000 feet.

“My hope is that George is as successful, if not more successful, than I was,” Kozak said. •

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