World’s Foremost Bank, which ranks among the top credit-card issuers in the United States, has moved to strengthen its board with the appointment of Donna Milrod.
Milrod also will serve on the board of the credit card bank’s parent company, Cabela’s, the Sidney, Neb.-based outdoor and hunting outfitter.
“I look forward to contributing my knowledge and experience, especially in management of financial services companies, to the company and assisting with the continued growth of World’s Foremost Bank,” Milrod said in a prepared statement.
World’s Foremost Bank ranked 14th among the top 15 U.S. credit card issuers with more than $13.8 billion in purchase volume, according to a February 2011 Nilson Report.
Cabela’s financial services division has experienced substantial growth in recent years. From 2008 to 2012, the company’s financial services revenue doubled, growing from about $159 million in 2008 to $319 million in 2012.
The company in 2012 reported $3.1 billion in revenue, and about 10 percent of that was financial services revenue. The company’s 2012 annual report showed that the $319 million in financial revenue was up 9.5 percent over the previous year.
Cabela’s has kept its credit card business even as other major retailers have sold theirs.
“It’s complementary to their (retail) business,” said Jim Chartier, an analyst at Monness, Crespi, Hardt & Co. With each new store opening, more customers apply for and are issued Cabela’s Club Visa cards. Cabela’s Club Visa can be used at Cabela’s stores as well as establishments that accept Visa, he said.
Cabela’s is “very conscious of their customer experience, and they want to control that entire experience, including the credit card business,” Chartier said.
Retaining ownership of its credit card business allows Cabela’s to better manage its credit card rewards program and collect “lots of customer data,” Chartier said. (Cabela’s also issues a loyalty card, Cabela’s Club Rewards.)
The credit card business “has been a good profit generator for them. Their charge-off rate is below that of some other credit card companies,” Chartier said.
Cabela’s initially operated a credit card business as a joint venture with First Commerce Bancshares of Lincoln. Wells Fargo Bank acquired First Commerce in 2000. Cabela’s took over the bank card division in 2001 with its new bank, World’s Foremost, named for the outfitter’s motto.
In 2010, the bank agreed to pay $10.1 million in restitution to cardholders and a $250,000 civil penalty in a settlement with the Federal Deposit Insurance Corp. over a complaint of unfair and deceptive practices. The company didn’t admit or deny the allegations and said the practices cited by the FDIC had been corrected.
During a 2012 expansion of the bank’s Lincoln offices, Cabela’s said it planned to increase its banking staff from 430 people to 770 over the next five years.
Milrod’s appointment “brings a wealth of regulatory, finance, and capital markets experience,” said Tommy Millner, Cabela’s chief executive.
Since October 2012, Milrod has been the chief administrative officer of the Depository Trust & Clearing Corp. The Depository, founded in 1973, is a U.S. financial services company that provides post-trade services to global capital markets, including information, clearing and settlement services for corporate and municipal bonds, government and mortgage-backed securities for thousands of financial institutions.
From 2009 to October 2012, Milrod served as deputy chief executive of Deutsche Bank North America. Milrod, who joined Deutsche Bank in 1999, held a number of other senior positions at the company.
Milrod joins Beth Pritchard to become the second woman among the 10 members who serve as directors on the board for Cabela’s.
Cabela’s plans to release its 2013 annual report and fourth- quarter 2013 earnings report Thursday.