Share Certificates Contribute The Lion’s Share Of Growth In 2018

Share growth continued to lag loan growth, which put further liquidity pressure on the industry.

Total share balances increased 5.2%, or $61.0 billion, year-over-year to reach $1.2 trillion as of Dec. 31, 2018. Annual growth, however, was 81 basis points slower than year-end 2017, and the quarter marked the second consecutive year of decelerating share growth. Share growth continued to lag loan growth, which put liquidity pressure on the industry. The loan-to-share ratio increased 3 percentage points from 82.5% as of year-end 2017 to 85.5% one year later.

The only share product in which credit unions reported accelerating growth was certificates. As members sought to take advantage of interest-bearing accounts in the rising rate environment, share certificate balances grew 12.3% year-over-year to $240.6 billion. That’s more than double the 6.1% rate credit unions reported at year-end 2017. IRA/Keogh balances were the only share product in which credit unions reported declining balances. They fell 0.2% annually to $78.3 billion.

Share certificates made up 19.5% of the share portfolio as of Dec. 31, but regular shares and deposits comprised the largest portion, 37.1%. Regular share and deposit balances grew 5.3% in 2018 to $458.5 billion and have increased their share of the portfolio 1.9 percentage points since year-end 2017.

Core deposits which include regular shares, share drafts, and money market shares comprised 72.3% of the total portfolio. Core deposit growth accounted for 53.3% of overall share growth in 2018 and contributed $32.5 billion to the $61.0 billion total share balance growth.

Share drafts, up 5.2% in the past 12 months to $192.8 billion, grew in size relative to other segments. By year-end 2018, 57.8% of all credit union members held a deposit account with a credit union. This is an important indicator of member engagement.

Credit unions continued to make yearly gains in average share balances, which increased nearly $1,000 from $9,534 as of Dec. 31, 2014, to $10,402 as of Dec. 31, 2018. An expanding membership combined with growth in average share balances indicates members are increasingly choosing credit unions as their primary financial institution.


Callahan & Associates |
Rank Credit Union State 12-Month Growth Total Shares
1 NEW DIMENSIONS* ME 80.75% $143,002,310
2 PFCU* MI 65.91% $470,377,205
3 NUVISION* CA 47.59% $1,957,087,562
4 FIRST COMMUNITY* ND 42.02% $705,359,770
5 PANHANDLE EDUCATORS FL 40.84% $217,849,906
6 HERCULES FIRST* UT 39.93% $87,630,304
7 INNOVATIONS FL 39.77% $238,514,023
8 COMMUNITY 1ST* WA 39.33% $121,965,047
9 CONNEXUS* WI 38.24% $1,992,087,096
10 BAY FL 37.33% $103,048,029

* Merged in the past year.

Case Study: Annual Bonuses Fund Deposit Surge At Elements Financial FCU

Strong deposits from a well-compensated SEG drive a two-pronged strategy for Elements Financial Federal Credit Union ($1.5B, Indianapolis, IN).


Elements Financial FCU
Data as of 12.31.18

HQ: Indianapolis, IN
MEMBERS: 107,221
ROA: 0.72%

Approximately 40,000 Elements members are affiliated with the credit union’s founding select employee group, drug maker Eli Lilly. The other 53,000 members are from the hundred or so other SEGs the credit union serves.

Each year in March, Eli Lilly pays out a management bonus, and approximately $100 million of that ends up deposited as shares at Elements. The credit union uses the influx of cash to fund loans throughout the year, and it has earmarked the spring as an opportune time to market its robust wealth management program.

The credit union offers attractive products and interest rates to encourage members to keep that new money which also includes tax refunds in checking and savings. If 50% of that new money is still in checking and savings after 90 days, it will stick and becomethe new normal balance for those members.

We believe that’s better for our members because as rates rise, they benefit sooner and their money is liquid if they need it in an emergency, says Chris Sibila, the credit union’s executive vice president and chief information officer.It’s also better for our balance sheet management because we don’t have to use external sources to fund loans.

Elements Financial has been offering investment services since 1997. Only 3% of the credit union’s member use its wealth management services, yet it generates 10% of the credit union’s net income. Approximately 80% of total revenue from wealth management is derived from fee-based advisory services, and investment services accounts.

Are Your Shares Contributing To Growth?

Analyze your credit union’s share growth with ease using Callahan Analytics. Using these tools can empower your credit union to pave the way with shares.


April 30, 2019

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