How are the Largest Credit Unions Performing at Mid-Year?

Slower share growth, tighter margins and a declining member growth rate are the headline trends industry-wide – Are the largest credit unions experiencing these same trends at mid-year?

 
 

Ten of the top eleven credit unions in the country, the bell weathers of the industry, have reported mid-year data to Callahan’s First Look program. Total assets for these credit unions reached $84.5 billion at June, representing over 11 percent of industry assets. How did these credit unions perform in key areas? Is 2006 any different than 2005 for these credit unions?

10 OF THE TOP 11 CREDIT UNIONS BY ASSETS

June 30, 2006

 

Assets

12M Grth

Shares

12M Grth

Loans

12M Grth

Members

12M Grth

Navy, VA

25600.1 Mn

2.4%

19791.5 Mn

5.1%

18234.0 Mn

19.2%

2,748,302

6.2%

State Employees, NC

13631.9 Mn

7.3%

12442.1 Mn

7.4%

10474.8 Mn

6.5%

1,322,904

6.0%

Pentagon, VA

9015.5 Mn

13.1%

7999.5 Mn

13.4%

8032.2 Mn

25.9%

702,662

8.3%

Boeing Employees

6601.7 Mn

18.6%

5775.0 Mn

19.1%

5374.4 Mn

25.3%

451,302

9.7%

Orange County Teachers, CA

6523.2 Mn

15.4%

5397.7 Mn

15.0%

4234.5 Mn

29.6%

342,089

6.4%

The Golden 1, CA

6057.2 Mn

1.7%

5336.0 Mn

0.4%

4901.7 Mn

11.1%

664,659

2.9%

Suncoast Schools , FL

5241.0 Mn

9.0%

4617.7 Mn

8.8%

3985.7 Mn

12.8%

408,628

8.1%

American Airlines, TX

4150.9 Mn

3.1%

3592.2 Mn

-0.2%

2277.9 Mn

6.0%

207,100

1.5%

Patelco , CA

3850.8 Mn

7.3%

3241.4 Mn

5.6%

2751.3 Mn

14.1%

226,290

6.9%

Security Service, TX

3839.8 Mn

1.2%

3074.8 Mn

-0.6%

3526.5 Mn

1.6%

581,045

0.7%

Source: Callahan & Associates, Inc.

 

 

 

 

 

 

Share Growth Dynamics Change in First Half of 2006

Share growth has slowed in 2006 versus the first half of 2005 as the growth dynamics have shifted. Shares grew 4.9 percent in the first six months of 2006, with regular shares and money market balances up at a double-digit pace. Certificates are also posting solid growth in these credit unions. However, this growth was partially offset by a 46.1 percent decline in share draft balances among these credit unions.

During the first six months of 2005, shares grew 6.7 percent for these credit unions led by double-digit growth in certificates and share drafts. Although members have continued to direct funds to certificates in 2006, core deposit preferences have shifted.

Lending Trends Mirror the First Half of 2005

Is the real estate slowdown impacting large credit unions? It does not appear to be. Lending momentum continues to be strong as the group’s total loans jumped 9.0 percent in the first half of 2006 compared to 7.8 percent in growth in first half of 2005.

Mirroring 2005 growth trends, real estate leads the increase with the first mortgage originations in the first half of 2006 at $7.7 billion compared to $7.6 billion in the first half of 2005. However, auto loan growth has slowed, rising 4.3 percent in the first six months of 2006 versus 6.5 percent over the same period in 2005.

Membership Growth Slows in 2006

Membership for the group grew by 2.8 percent as it added 205,472 new members in the first six months of 2006. This was slower than the 3.8 percent growth posted during the same period last year when 263,430 net new members were added.

Net Interest Margin and Return on Assets Decline

Although interest income is growing at a strong 20.6 percent rate, these credit unions are also increasing dividend payments to members. As a result, the net interest margin for the group declined from 263 basis points in June 2005 to 254 basis points in June 2006. Return on assets also declined, from 1.22 percent last June to 1.07 percent in June 2006.

Some key financials and ratio for the group:

Key Financials

 

30-Jun-05

30-Jun-06

12 month growth

Members

7,232,815

7,654,981

5.8%

Assets

$79,077,244,830

$84,511,996,354

6.9%

Shares

$66,342,021,597

$71,267,967,767

7.4%

Loans

$55,045,197,243

$63,792,939,636

15.9%

Loan Income

$1,511,471,452

$1,848,401,894

22.3%

Fee Income

$207,006,678

$220,452,792

6.5%

Total Income

$2,183,067,313

$2,633,484,924

20.6%

Loans/Assets

69.6%

75.5%

 

Ave Cost of Funds

2.3%

3.1%

 

Operating Expenses/Income

36.3%

34.1%

 

Dividends/Income

33.3%

40.0%

 

ROA

1.2%

1.1%

 

Here is complete look at the top ten credit unions' financial statement.

 

 

 

Aug. 14, 2006


Comments

 
 
 
  • America's Largest Credit Unions

    Based on December, 2008 data

    http://creditunionaccess.com/top50creditunions.htm

    America's Largest Credit Unions

    Ranked by total assets and how many members.

    In total assets, these top 50 credit unions account for $228 billion of the $825 billion in U.S. credit unions. In members, the top 50 account for 19 million of the 90 million memberships.

    Herb
     
     
     
  • I thought it was very informative to describe the key areas of opperation in these CU's. It was interesting to see that on the average that each CU is meeting a ROA of 1.1 in a time that many CU's are not that lucky.
    Gregg Hipp
     
     
     
  • Check your data. I don't believe that share draft balances dropped 46.1%
    Joe Schroeder