Are The Largest 10 Credit Unions A Good Barometer For The Industry?

How does the performance of the largest 10 credit unions stack up against the overall industry?

 
 

Opinion varies on the importance of large institutions as bellwethers for the rest of the industry, so we decided to take a quick look at the 10 largest credit unions compared to the rest of our FirstLook credit unions. As of this analysis, our FirstLook Peer Group contains credit unions from every state and a wide range of assets, $1.4M to $40B representing roughly 80% of the industry’s total assets.

No credit unions on this list had significant (representing more than 5% of assets) mergers or purchase & assumptions in 2009. STAR One (CA, and formerly #12), jumped into the top 10 with asset growth of 24%,  leap-frogging over American Airlines (TX, formerly #10) and America First (UT, formerly #11).

Key Financial Performance Ratios
Data for all FirstLook Credit Unions as of December 31, 2009
Rk Credit Union St Total Assets
(Billions)
12-Mo.
Share
Growth
12-Mo.
Loan
Growth
Loan
Orig.
Growth
12-Mo.
Mem.
Growth
Net Interest
Margin
OpEx Ratio Delin.
1

Navy

VA

$39.6

15.1%

-0.1%

-0.1%

6.7%

3.72%

2.78%

1.74%

2

State Empl.

NC

$19.6

19.4%

6.3%

-16.3%

4.7%

2.17%

2.04%

1.20%

3

Pentagon

VA

$14.0

8.2%

3.3%

20.1%

9.3%

2.04%

1.06%

0.71%

4

BECU

WA

$8.6

0.3%

-3.1%

-5.5%

7.1%

3.47%

2.49%

1.86%

5

SchoolsFirst

CA

$8.2

6.1%

-12.3%

-15.6%

8.2%

2.84%

1.55%

2.22%

6

The Golden 1

CA

$7.6

5.8%

-6.7%

6.4%

-1.3%

2.64%

2.19%

2.65%

7

Alliant

IL

$7.0

20.3%

7.7%

30.6%

8.1%

1.85%

0.82%

1.16%

8

Security Service

TX

$5.5

12.6%

11.1%

6.5%

8.6%

2.67%

2.34%

1.48%

9

Suncoast Schools

FL

$5.4

-4.2%

-8.5%

-28.3%

4.6%

2.90%

1.92%

5.02%

10

STAR One

CA

$5.1

18.4%

28.2%

34.7%

4.7%

2.23%

0.75%

0.29%

Average for the Group

11.5%

0.9%

1.1%

6.1%

2.88%

2.07%

1.68%

Average for all FirstLook CUs

11.5%

2.4%

7.2%

2.8%

3.19%

3.15%

1.77%

The FirstLook Peer Group and the largest 10 credit unions in aggregate posted record share growth of 11.5%. Performance varied widely in the big CU group, from -4.2% at Suncoast (FL) to 20.3% at Alliant (IL).

On the other side of the balance sheet, these large credit unions grew their loan portfolio less than 1%. While Pentagon (VA), Alliant, and STAR One increased loan originations in 2009 by double digits, half of the group originated fewer loans in 2009.   

Credit unions in the FirstLook group saw similar aggregate performance on the share side yet were more aggressive in lending. On average, our FirstLook peer group posted a 7.2% increase in loan originations in 2009 and grew loans on the balance sheet by 2.4%.

All but one credit union in the top 10 grew membership at a rate well above the FirstLook average of 2.8%. Pentagon (VA), led the group in member growth with 9.3% (full disclosure: at least one of these new member came from this office!).

The largest 10 credit unions reported an average net interest margin at year-end of 2.88%, with individual performance ranging from a low of 1.85% (Alliant) to a high of 3.72% (Navy). The group also posted a wide range in the operating expense ratio, from Star One at 0.75% to Navy at 2.78%. The average OpEx ratio for this group was 2.07%, resulting in a spread of 81 basis points.

The FirstLook peer group told a different story. This group of over 5,000 credit unions posted an average net interest margin of 3.19% and an expense ratio of 3.15%, resulting in a spread of just four basis points.

For more on FirstLook data, read 3 Trends from Year-End Data, look up individual credit union data, and open Peer-to-Peer or CU Analyzer to start your year-end analysis today.

 

 

 

Feb. 8, 2010


Comments

 
 
 
  • These giants do not represent the industry. Their statistics are so at odds with the typical credit union that they might aswell be two separate industries. Compare the stats of cu's over $500 million with those below $50 million and the disparity is enormous. We are fast approaching an industry consolidation that will eliminate all cu's under $50 million.
    small cu ceo
     
     
     
  • One item no one has discussed: does it make sense for the NCUSIF to have this much concentration risk in any one credit union? Two years ago no one saw a problem with the NCUSIF's concentration risk at Wescorp and US Central...look how that turned out. Certainly the risk any one of these credit unions poses is minimal but put any five of these into one significant risk pool and the NCUSIF could not handle the losses. Maybe any CU over $1 billion should be declared to big to share in the cooperative fund? I believe the industry has outgrown its cooperative existence.
    Stats Query
     
     
     
  • To Commenter #2 - you're already there. The fact is that no one wants to acknowledge, especially in this forum, that this is an industry rapidly approaching a precipice. Perhaps the $50M threshold is a little low? Perhaps we're all vulnerable? Might want to change topics from fluff to CAMEL and the pending crisis so many of us face. As an aside - Isn't it funny how we're all commenting anonymously? Speaks volumes.
    Anonymous