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Strong share growth at U.S. credit unions continued into the second quarter of 2017. Annual growth at mid-year topped 8.1%. That’s 16 basis points higher than the second quarter of 2016.
Regular shares and deposits totaled $433 billion and comprised the largest segment 37.3% of the deposit portfolio. The share of the deposit portfolio decreased for money market accounts, share certificates, and IRA/ Keogh accounts, whereas share drafts and regular shares increased their piece of the pie in the past 12 months.
Share certificates have continued this year to lose ground in proportion to other share types. As of June 30, 2017, certificates represented 17.9% of total shares. That’s a decline of 60 basis points since last year and a decrease of 5.4 percentage points over the past six years. Over the same six years, the portion of regular shares in the share portfolio has increased 5.0 percentage points from 32.3% to 37.3%. Share drafts increased 2.9 percentage points over the period. As of second quarter they accounted for 15.5% of the share portfolio.
Credit unions posted positive annual growth for all share types in the second quarter of the year. At 14.8%, share drafts grew the fastest. Credit unions ended the second quarter with $180 billion in balances for this deposit product. That’s a 1.6-percentage-point increase in annual growth versus second quarter 2016.
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From a regional perspective, deposit balances expanded at the fastest rate at credit unions in the NCUA’s Western Region. There, deposits grew 10.7% year-over- year. Credit unions in the Central Region reported the slowest growth of any group at 6.8%.
Click the graphs below to enlarge and then continue reading to see the pair of summer promotions Central Willamette Community Credit Union ran to attract deposits.
The average share balance for the industry increased 3.6% year-over-year. Credit unions in the top 20th percentile reported an average share balance of $10,489. Those in the median and bottom 20th percentiles reported average balances of $7,362 and $4,580, respectively.
CENTRAL WILLAMETTE COMMUNITY CREDIT UNION
Like many lenders enjoying a brisk business, Central Willamette Community Credit Union understands the need to attract deposits.
The Oregon credit union met that challenge with a pair of summer campaigns designed to attract deposits and increase awareness of the institution.
First, with interest rates finally rising, the credit union felt the time was right to test the savings appetite of its four-county market with a CD special.
After reviewing its own balance sheet and competitors’ offerings, Central Willamette settled on a share certificate special with a 36-month term and two different rates 1.6% for deposits lower than $100,000, and 1.75% for those greater.
We hadn’t promoted any kind of rate special in quite some time, says chief marketing and sales officer Amanda Lunger. There hadn’t been a market until recently.
In the first couple weeks, the credit union attracted $1.2 million in deposits, including deposits of $200,000 and $60,000 from new members. It followed that up with an 18-month CD special in September.
Once these members join, the credit union onboards with phone calls, letters, and emails to entice new account-holders to adopt stickier products such as online banking, bill pay, or direct deposit.
This summer, Central Willamette also ran a savings contest to encourage savings among the area’s youth and inspire goodwill in communities.
For the contest, the credit union asked entrants a simple question: If you could create money, what would your dollar bill look like?’
The credit union provided the drawing paper and displayed submissions until winners were announced. In return, entrants had to have a Kid Kash or Youth Savings account with Central Willamette Community.
People typically keep the first account they open with a financial institution, Lunger says. We are trying to get people in here young and have them grow with us.
Strategy Performance 2Q 2017
Credit unions are indeed having an outstanding 2017 right on the heels of a very strong 2016 and 2015. Eliminating barriers and connecting with members distinguishes credit unions from other financial institutions and makes the movement stronger than it’s ever been. Learn what the industry’s most successful credit unions are doing in this issue of Strategy Performance.