Credit Union Indicators Call For Mets Triumph

The Big Apple will win in seven, according to credit union performance data.
Stephanie Clark

Never having made it to the World Series, baseball fans at Callahan & Associates in Washington, DC, are left here wishing the Washington Nationals could have broken that streak this past season. That dream was cut short when they didn’t make it to playoffs. Instead we’re now watching the Mets and Royals play for the World Series title. To predict the World Series outcome, we used Peer-to-Peer to look at second quarter 2015 credit union performance of the Kansas City and New York City metropolitan areas.

Victoria-Royals
Callahan employee Victoria Taylor attended dozens of Royals games a year growing up in Kansas City, but she has to go with the numbers here. That doesn’t mean she can’t show the love for her favorite team, though!

12-Month Loan Growth

New York City: 7.0%
Kansas City: 8.0%

Kansas City takes the lead at the beginning of the Callahan Credit Union World Series, reporting 8.0% loan growth, outperforming New York City by 1 percentage point. However, both metropolitan areas grew slightly slower than the national average of 11.1%.

Advantage: Royals

Loans-To-Shares

New York City: 71.8%
Kansas City: 63.5%

Loan interest income continues to be the primary source of income for credit unions, making up 63.5% of total income nationwide, meaning converting deposits into loans is critical to covering expenses. With loan growth outpacing share growth by 1.7%, New York City credit unions reported a loan-to-share ratio of 71.8% while Kansas City credit unions reported a loan-to-share ratio of only 63.5%.

Advantage: Mets

Share Draft Penetration

New York City: 60.6%
Kansas City: 52.1%

Share draft penetration helps indicate how many members use the credit union as their primary financial institution. New York City credit unions not only got runners on base with a higher number of average members per credit unions, they’re also driving those runs in and getting more share draft accounts per member.

Advantage: Mets

Delinquency

New York City: 1.72%
Kansas City: 1.21%

Kansas City credit unions not only reported lower delinquency than New York City credit unions, they also reduced their delinquency 33 basis points annually, compared to their Big Apple counterparts who increased their delinquency by 63 basis points.

Advantage: Royals

Operating Expense Per Member

New York City: $236
Kansas City: $176

As rates remain low, credit unions strive to manage operating expenses. On par with the national average, Kansas City credit unions have an operating $176 in operating expenses per member. New York credit unions reported $236, 34.1% higher than Kansas City and national peers.

Advantage: Royals

Member Growth

New York City: 3.4%
Kansas City: -0.9%

Member growth has been soaring, expanding 4.0% nationwide, with credit unions now serving more than 102 million members. New York credit unions experienced similar growth of 3.4% annually, while Kansas City credit unions reduced their membership by 0.9%

Advantage: Mets

Efficiency

New York City: 91.1%
Kansas City: 96.0%

Efficiency ratios nationwide have increased since June 2014. The industrywide ratio, which measures how much money it takes credit unions collectively to earn $1 of revenue, expanded 37 basis points to 80.3%. A lower efficiency ratio indicates a credit union is effectively using its assets and liabilities. New York City credit unions are more efficient than Kansas City credit unions posting an efficiency ratio 4.9 percentage points lower.

Advantage: Mets

Final Tally

New York City: 4
Kansas City: 3

Cooperatives in both metropolitan areas continue to thrive, but in the Callahan Credit Union World Series there can only be one winner. Kansas City credit unions might post lower operating expenses per member, lower delinquency, and higher loan growth, but it was not enough to overcome New York City credit unions. Therefore, Callahan predicts the Mets will win the World Series in game seven.

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October 30, 2015

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