Credit unions across the country use their ROM score to support member-facing goals, hold staff accountable to better serve members, and demonstrate their impact on the communities they serve. ROM is a quantitative way for credit unions to show off the cooperative difference and demonstrate credit union member value.

Take a look at the top 10 credit unions in each asset range to see which ones made the leader board. If you don’t see your credit union and want to know where it ranks, contact Callahan today for your score.

FOR U.S. CREDIT UNIONS $20M-$50M | DATA AS OF 12.31.24

FOR U.S. CREDIT UNIONS $50M-$100M | DATA AS OF 12.31.24

FOR U.S. CREDIT UNIONS $100M-$250M | DATA AS OF 12.31.24

FOR U.S. CREDIT UNIONS $250M-$500M | DATA AS OF 12.31.24

FOR U.S. CREDIT UNIONS $500M-$1BM | DATA AS OF 12.31.24

FOR U.S. CREDIT UNIONS >$1BM | DATA AS OF 12.31.24

Rank	Name	City	State	Total Assets	ROM Score
1	Summit	Madison	WI	$7,458,311,100	100
2	Empeople	Moline	WI	$2,246,287,693	99.78
3	Veridian	Waterloo	IA	$7,960,128,611	99.56
4	Lake Michigan	Grand Rapids	MI	$14,527,369,395	99.34
5	Michigan Schools and Government	Clinton Township	MI	$3,895,082,533	99.12
6	CoVantage	Antigo	WI	$3,725,346,803	98.89
7	Eastman	Kingsport	TN	$9,097,283,047	98.67
8	Idaho Central	Chubbuck	ID	$12,120,188,554	98.45
9	Stanford	Palo Alto	CA	$4,331,816,368	98.23
10	Logix	Valencia	CA	$9,726,331,677	98.01

 

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]]> https://creditunions.com/features/kellogg-community-balances-loan-growth-with-member-impact/ Mon, 28 Feb 2022 06:04:45 +0000 https://creditunions.com/?p=70495 Substantial loan growth is helping propel Kellogg Community Credit Union ($818.1M, Battle Creek, MI) toward the $1 billion-asset mark. But rather than concentrating on asset milestones, it remains focused on the impact it can deliver to the members and communities it serves. Year-over-year loan growth during the third quarter of 2021 was 18.5%, nearly three […]

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]]> Substantial loan growth is helping propel Kellogg Community Credit Union ($818.1M, Battle Creek, MI) toward the $1 billion-asset mark. But rather than concentrating on asset milestones, it remains focused on the impact it can deliver to the members and communities it serves.

Year-over-year loan growth during the third quarter of 2021 was 18.5%, nearly three times the national average. The credit union reported growth across a variety of areas, but two of the most significant were business loans made through the Paycheck Protection Program which totaled roughly $10 million and mortgage loans, which also grew at an 18% annual rate.

TOTAL LOANS AND ANNUAL GROWTH

FOR KELLOGG COMMUNITY CREDIT UNION | DATA AS OF 12.31.21

Approximately 75% of KCCU’s PPP business came from existing members, and the offering presented both opportunities and challenges.

“Right away we were going, Wow, here’s a new niche we can tap into with these businesses that chose us to help them during the pandemic,'” says Lindsey Law, chief lending officer at Kellogg Community.

The credit union paired business development officers with applicants to shepherd them through the PPP process as well as strengthen the relationship by encouraging the borrower to bring over account and lending relationships from other institutions. Although PPP was the initial relationship starter, Law says there was an understanding those loans would be forgiven eventually and new commercial clients wouldn’t stick around if staff didn’t take steps to form relationships.

PPP lending also helped the credit union diversify the range of businesses it serves. There were plenty of restaurants, medical accounting firms, and other local mom-and-pop shops, but those weren’t the only small businesses in need of aid.

“Shockingly enough, we had quite a bit of chiropractic offices, which has resulted in a lot of new relationships,” Law says.

Along with the boost in commercial relationships, KCCU has also recorded improvements on the credit card front. Volumes dipped at the start of the pandemic, when consumer spending slowed and government relief efforts led many to pay down outstanding balances. By the end of the third quarter, however, balances had returned to roughly where they stood in late 2019 and are in line with historical norms for the institution.

Law says KCCU has plans in place to bolster that growth with balance transfer specials, cash-back offerings, and more. Some automated loan increases are also in place based on certain criteria to help increase members’ credit card usage.

Business is booming in business lending and credit cards, but in the real estate space, KCCU is bracing for a slowdown. After extremely high volumes over the past two years, management is anticipating a return to relative normalcy with the prospect of rising rates. As a result and in expectation of a shift from mortgage refinancing to more purchase activity staff members are focusing on building relationships with real estate agents who partner with the credit union and can help bring in business.

We Have Them Covered’

Kellogg Community currently counts more than 45,000 members on its roster, and although membership growth has fluctuated a bit in recent years, it has generally ranged in the 5% to 6% range.

According to Tony Wright, chief financial officer, the credit union will be more proactive about getting into the community and raising awareness in the coming year. That starts by focusing on impact and ensuring consumers understand KCCU offers a better alternative than other banking providers.

Fees are one key example. Wright says management has long tolerated waiving any overdraft of $5 or less to avoid a fee and has been discussing raising that threshold to $10.

“We’ve never really marketed that $5 tolerance,” Wright says. “In the area we’re in, it’s not that common to have that so we’re going to market that and tell our story that way.”

One of our big initiatives this year is to tell people how we have them covered in a way we’ve never told them before. We have people living paycheck to paycheck in a couple of our communities. How can we help them?

In addition to promoting its friendlier fee policies, the credit union tells its story by emphasizing the value it provides to members. The Kellogg Community website includes a page that promotes the $15.8 million members saved in 2021, which breaks down to an average of $358 per member. A savings report shows how members with a deeper relationship with KCCU save more annually, and an account breakdown details the average savings for a variety of products. For members and nonmembers that want to learn how they can increase their savings, KCCU will review their accounts free of charge.

“One of our big initiatives this year is to tell people how we have them covered in a way we’ve never told them before,” Law says. “We have people living paycheck to paycheck in a couple of our communities. How can we help them?”

Kellogg Community has its eye toward serving members more deeply, and it has a solid foundation on which to build. The credit union consistently ranks high in Callahan’s Return of the Member (ROM) index, which assesses institutions by not only rates and fees but also the variety of products and services available to members and the average depth of member relationships.

How do you compare? Callahan’s Return Of The Member scoring system quickly shows credit union leaders how much value they’re delivering to members compared to credit union peers. Learn more today.

As far as the strength of the institution, annual asset growth stood at 13% at the close of the third quarter. Wright says assets are likely to cross $1 billion within the next three years; however, the credit union is emphasizing organic growth rather than, say, merging simply for the sake of growth. The coming year also will include a major focus on gaining efficiencies. Wright and Law pointed to new software the credit union is implementing to scale different processes. It’s also centralizing some loan processing so branch staff can focus more on having educated conversations with members about why the credit union is their best option rather than focusing on sales or checking off items from an underwriting list.

“The focus right now is already on efficiencies,” Wright says. “But as far as what we’re doing, hitting $1 billion isn’t going to change anything. We’re just trying to help as many members as we can.”

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]]> https://creditunions.com/features/a-big-product-list-from-a-small-credit-union/ Mon, 19 Jul 2021 05:00:49 +0000 https://creditunions.com/?p=71044 How Riverways FCU is making a growing impact in its mid-Missouri market while listening to members and limiting risk.

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]]>  

Top-Level Takeaways

• Riverways FCU offers 30 different savings, checking, loan, and business accounts. Each product has to carry its own weight but might be used by only a few members.

• The competition has reacted by adjusting their own products.

Riverways Federal Credit Union ($74.6M, Rolla, MO) shows you can be a jack of all trades and a master of many by successfully providing an array of products and services atypical for a cooperative its size.

The Products Services tab on the Show Me State cooperative’s home page shows just how broad the selection is, including 10 savings and 11 loan options, five checking accounts, four business accounts, and even investment services. Riverways also offers online and mobile banking, deposits, and bill pay.

 

The one notable absence is credit cards, which the credit union stopped offering about 10 years ago, its president says, since loan demand has been strong, profitable, and growing enough without that additional risk.

Scott Shults, President, Riverways FCU

We try to offer a very attractive suite of products and services. The challenge is communicating what we offer to our member-owners, says Scott Shults, who took the helm at Riverways in 2013 after nearly 10 years at a community bank.

Member education is paramount to the success of such a lineup, he says. You need to keep all the products in front of the members who need them. I’ve seen closed account surveys stating they moved because we didn’t have a service when, in actuality, we did offer that in a very robust way. It’s also a challenge to keep all staff educated in the different products.

Show-Me State Cooperative Shows Out In The Metrics

The mid-Missouri cooperative has met that challenge well, according to metrics drawn from the Callahan Associates Peer-to-Peer database. For instance, according to Search Analyze data on CreditUnions.com , Riverways outpaces or holds up well amongst its peers in the following 10 categories.

As the bottom two items on this list show, it’s not cheap to offer so much to relatively few members. With such a large list of offerings, we do have a higher employee count and related expenses compared with our peers, Shults says.

But as the rest of the table shows, the results are positive and profitable, and it’s those employees who provide some of the critical intel needed to identify and refine the offerings that members say they want and would be likely to use. And that then helps the institution compete.

Give And Get: Teller Talk Leads To Deposits Coming From Other FIs

A good example of the result of that feedback is the Give and Get money market account, which pays above-market rates to members willing to make at least half their deposit directly from another financial institution.

 

Our tellers were the catalyst to this account, Shults says. They’d often tell us of a member who brought us part of their deposits from a bank to open a CD (back when we needed deposits).

The conversation became, how do we get all the deposits from them? After a brainstorming session or two, we decided to offer a better than average rates (but below borrowing rates) and only for those members who were bringing in half from another financial institution. This allowed us to have a product that attracted business looking for rates without cannibalizing our own deposits.

Products and services have been added one by one in a very intentional process, Shults says, that also has been driven by the experience of having to refer members to other financial institutions for products it doesn’t offer.

That can easily happen in a small but competitive market with a diverse and savvy populace. Rolla itself is about 100 miles southwest of St. Louis and is home to about 20,000 people and to the 8,000-student Missouri University of Science and Technology, as well as a large regional medical facility. The surrounding area is primarily rural with a sprinkling of small towns.

Riverways FCU opened for business in 1959 as Rolla FCU, housed in a federal building for federal employees, who still form its core membership. The cooperative now has its home branch in Rolla, another in Salem, and a drive-thru location in the town of Cuba.

 

In all of our areas there is a great abundance of community banks, but access to credit unions is limited with only one other, much larger, cooperative, in the area, Shults says.

10 Tips For Thinking Big For Your Members

Riverways FCU offers its 8,300 or so members a product lineup that rivals that of other financial institutions much larger than this mid-Missouri cooperative. Here’s some advice from its president of the past eight years, Scott Shults, on how others can do the same.

• Listen to your members. They’re the owners. Treat them as such.

• Listen to your front-line employees. They’re your best source of information.

• Don’t be afraid to try something new.

• Don’t be afraid to try something a second time. Just figure out why it didn’t work the first time and make changes.

• Actively create a network of other credit unions you can trust for great ideas. And contribute to their ideas. Make each other better.

• Figure out what your competitors are doing great, and do it better.

• Avoid letting a product or service cost the membership money.

• Fees are OK if there’s a service that provides value to the member paying that fee.

• Take care of your board. They’re the first link in the chain.

• Take care of your staff. They’re the biggest key to your success.

Meeting Diverse Needs While Not Losing Money

Competing in ways that serve and grow membership while protecting the bottom line is a continuing imperative. Our member base is very diverse and we focus on keeping a product for everyone’s needs and stages in life, Shults says.

We don’t have one that really is the most favored by the membership. We’ve seen uniform growth in all of them from different segments of the membership, the veteran credit union executive says.

What each of those products has in common is that they were created because members asked for them, and that don’t lose money or cause other undue risk to the institution.

Our goal, as we evaluate each item, is to be able to offer it in a break-even launch so it doesn’t negatively impact the credit union and other members who may not utilize that product, Shults says, adding, Once launched the goal is to have it contribute to the overall financial health of the organization.

Even products of limited appeal are welcome, as long as they pay their own way. Our call as a credit union is one of service, so we take the approach that if we can launch a product at a break-even point, even if it’s only for a few of our members, we will, Shults says.

 

Leaving Participations Behind While Growing Commercial

One of those areas that started out small and has been growing steadily is Riverways’ commercial work.

We stepped very slowly into this arena seven years ago, and there have been some learning curves. But now we originate $7 million to $10 million a year there with very minimal delinquencies or losses, Shults says.

That trend fits a pattern and has now been accompanied by a strategic change in loan portfolio management during the pandemic. Shults says his credit union’s loan demand has always exceeded its ability to grow deposits and that it has typically sold about $4 million in participations a year to keep its loans-to-deposits ratio at around 95%.

CU QUICK FACTS

Riverways FCU
Data as of 03.31.21

HQ: Rolla, MO
ASSETS: $74.6M
MEMBERS: 8,291
BRANCHES: 2
12-MO SHARE GROWTH: 37.57%
12-MO LOAN GROWTH: 25.44%
ROA: 1.23%

But deposits surged 30% last year, allowing Riverways to keep all its loans at home. While we did participate in the Payroll Protection Program for our commercial members the big change was liquidity, Shults says. There were no new lending initiatives, just a change in the participation practices. We also saw Zoom calls and DocuSign utilization become the delivery methods of choice.

Impact For The Member And Beyond

Riverways currently has a score of 94.51 out of 100 in Callahan’s proprietaryROM (Return of the Member) index that quantifies return to savers and borrowers and member usage. That high score is not typical for an institution whose size could seem to limit its ability to offer a wide range of products.

But Shults says he’s not particularly surprised. We always hope that we’re offering a great value to our members. We spend a lot of time and money to do so. It’s really a testament to the board and staff to have the vision and ability to execute the mission statement. We have a group, top to bottom, that gives 100% to make sure the members’ needs are met.

The credit union also works to spread its impact and value in other ways including through event and team sponsorships, reality fairs, and hundreds of hours a year in counseling our members, which may never be publicized but is at the heart of our mission statement, Shults says.

That community impact even extends to the competition, Shults says. By being aggressive, we’ve impacted local banks to compete with rate and fee structures much closer to that of a credit union.

 

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]]> https://creditunions.com/blogs/callahan-news/a-nod-to-clients-and-all-the-credit-unions-that-measure-member-value/ Tue, 03 Dec 2019 03:22:00 +0000 https://creditunions.com/blog/a-nod-to-clients-and-all-the-credit-unions-that-measure-member-value/ Callahan clients comprise majority of top credit unions in America.

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]]> A few weeks ago, Forbes (alongside market research firm Statista) released its second annual listing of the Best Credit Unions In Each State.

That list included many familiar faces. In fact, a full 61% of the honorees analyzing data, it’s one of the many things we do here at Callahan & Associates are clients of Callahan. These credit unions, and many other industry leaders, look to Callahan & Associates for industry insights and data analysis geared toward helping the nation’s financial cooperatives make decisions that better serve members and support organizational growth.

Congratulations to all our clients on the list!

A Measure Of Member Value

Surveys, reviews, Net Promoter Scores, and lists like Forbes’ which is based on consumer feedback are standard tools for measuring member perception. But, how can credit unions apply a number to the benefit they return to membership?

Enter ROM, a comprehensive metric designed by Callahan & Associates that uses savings, lending, and product usage to quantify member value and assign a score to every credit union in the United States. Credit unions across the country use their ROM score to set member-facing goals, hold staff accountable to better serve members, and demonstrate their community impact.

ROM is a quantitative way for credit unions to shout out the difference they make every day in the lives of their members and communities.

Are you curious about where your credit union falls on the ROM index? Are you interested in seeing how your organization compares against credit unions of a similar size? Find out what Callahan has to offer, and request your score today. A Callahan team member will be in contact.

Request Your ROM Score

 

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]]> https://creditunions.com/blogs/graph-of-the-week/military-credit-unions-lead-the-way-on-veterans-day/ Mon, 11 Nov 2019 06:00:42 +0000 https://creditunions.com/?p=66396 This Veterans Day, see how military credit unions stack up to the industry as a whole.

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]]> Download PDF

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]]> https://creditunions.com/features/a-method-to-measure-member-relationships/ Wed, 30 Oct 2019 12:58:00 +0000 https://creditunions.com/blog/a-method-to-measure-member-relationships/ See how credit unions in different regions of the country are engaging with their members in this detailed ROM breakdown.

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]]> The credit union movement prides itself on offering superior rates, products, and services to its member-owners, but quantifying the value inherent in cooperative strategies can be tricky. The Return of the Member (ROM) index is one way to do that.

ROM is a comprehensive metric that uses 5300 data from all U.S. credit unions to quantify the value credit unions return to members. Designed by Callahan & Associates more than 20 years ago, ROM assigns every credit union in the United States a value between 1 and 100 based on three core functions savings, lending, and product usage.

Credit unions can use ROM to compare their performance against any peer group such as asset base or state to calculate a percentile rank and overall final score.

Callahan regularly reviews ROM data to see how credit unions of similar sizes compare against one another. The firm then shares insights it has learned from high performers on CreditUnions.com. For example, ROM performance helped Callahan uncover how a slim operating structure allowed Credit Union of Vermont to provide market-leading deposit and loan rates. Read about that here. And, Sharonview FCU has tracked its ROM score for more than 10 years. The South Carolina cooperative even includes a member benefit component based on ROM as part of its annual goal setting. Read about that here.

Where Do You Rank?

Callahan’s Return of the Member (ROM) uses a single metric to showcase the value a credit union delivers to members relative to peers. Want to know where you rank? Request your ROM score today.

Learn More

However, the following examination does not spotlight individual credit unions. Rather, it dives into the individual components of ROM and discusses their importance. To gain the most from the following insights, grab your ROM score and keep it handy for easy comparisons against your regional and national peers.

Return To Savers

The return to savers component of ROM measures how well a credit union provides deposit services to its members. It takes into account aspects such as dividends paid, changes in share balances, and the compound annual share growth.

• Nationally, dividends as a percentage of total income stood at 14.0% as of midyear 2019. One year ago, that was 12.3%. Annualized dividends for the industry totaled $11.2 billion as of the second quarter of 2019.
• Credit unions in the NCUA’s Eastern Region led the country in average dividends paid, at 0.94%. This metric is calculated by taking the total dividends and interest paid on deposits paid by the credit union divided by total shares.
• The three-year share growth, which provides a longer-term view of savings trends at a credit union, was 6.5% for the industry at midyear.

RETURN TO SAVERS

FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.19

Callahan & Associates | CreditUnions.com

	U.S.	NCUA Western	NCUA Southern	NCUA Eastern
Dividends/Income	14.0%	13.3%	14.4%	14.3%
Average Dividend Paid	0.87%	0.79%	0.89%	0.94%
3-Year Share Growth	6.5%	6.9%	5.7%	6.7%

Return To Borrowers

The return to borrowers, or lending component of ROM, recognizes that credit unions were created to provide credit to their members at a reasonable cost. It takes into account things like loan rates rewarding those institutions that offer lower rates as well as a credit union’s growth in lending and product variety. Because of the increased participation in the secondary market, Return To Borrowers also considers a credit union’s loan servicing portfolio.

• As of June 30, 2019, the loan-to-share ratio, including mortgage servicing and excluding participations, was 98.5% for the industry.
• Yield on average loans for the industry was 4.88% as of the second quarter of 2019. That’s an increase of 28 basis points from one year ago as credit unions continue to reap the benefits from the four rate hikes in 2018.
• The average loan balance for consumer and real estate loans increased 1.0% year-over-year to $14,381 for the industry. Increased balances suggest higher usage and can be a proxy for the value members see in their cooperative’s loan products.

RETURN TO BORROWERS

FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.19

Callahan & Associates | CreditUnions.com

	U.S.	NCUA Western	NCUA Southern	NCUA Eastern
(Loans + Servicing Portfolio – Purchased Participations)/Shares	98.5%	101.8%	85.3%	105.1%
Yield on Average Loans	4.88%	4.62%	4.79%	5.23%
Growth in Average Consumer & RE Loan Balance	1.0%	0.2%	2.4%	0.8%

Member Service Usage

The member service usage component of ROM measures whether members are using the credit union as their primary financial institution. It considers performance in areas like the number of core accounts a credit union holds and penetration rates as well as employee measures like productivity and revenue generated per dollar of salary and benefit.

• At midyear, a full 58.4% of members held a share draft account with their credit union.
• Credit unions in the NCUA Western Region reported the highest auto loan penetration at in the second quarter of 2019 24.5%.
• Industry revenue grew 12.4% from 2018 levels, while salary and benefits increased 9.2%. This dynamic pushed revenue per dollar of salary and benefit to $3.27 from $3.18 the year prior.

MEMBER SERVICE USAGE

FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.19

Callahan & Associates | CreditUnions.com

	U.S.	NCUA Western	NCUA Southern	NCUA Eastern
Share Draft Penetration	58.4%	60.0%	57.5%	57.6%
Auto Loan Penetration	21.3%	24.5%	22.5%	17.0%
Credit Card Penetration	17.6%	17.7%	14.2%	20.2%
1st Mortgage Penetration	2.4%	2.2%	2.5%	2.6%
Total Income Per $ Salaries and Benefits	$3.27	$3.16	$3.21	$3.45

 

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]]> https://creditunions.com/blogs/industry-insights/funds-availability-cannabusiness-deposits-the-road-to-recovery/ Mon, 22 Jul 2019 12:48:00 +0000 https://creditunions.com/blog/funds-availability-cannabusiness-deposits-the-road-to-recovery/ Five can't-miss data points this week on CreditUnions.com.

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]]> This week, CreditUnions.com finds one credit union breaking the one-size-fits all approach to funds availability, another collecting cannabis deposits in the Evergreen state, and a third walking the long road to recovery.

Here are five can’t-miss data points:

1

As credit unions push to raise deposits, they might also find members pushing back to quickly access those funds, regardless of the service channel they’re using. Nusenda Credit Union has a well-vetted methodology for dealing with funds availability, one that balances risk to the credit union and rewards the member with a consistent user experience. The New Mexico credit union uses what it calls its Funds Availability Matrix, a proprietary formula which eliminates the one-size-fits-all approach and goes beyond funds availability dictated by Regulation CC.

Read: A Matrix To Temper Risk And Break The One-Size-Fits-All Approach To Funds Availability

$18 Million

Recent estimates by Barclays suggest the U.S. cannabis market were it legal today would be worth nearly $30 billion in annual sales and primed to grow by an additional $10 billion in the next decade. However, cannabis remains illegal on the federal level. As such, businesses that serve this market often referred to as cannabusinesses are often excluded from the mainstream financial system. According to FinCEN’s Marijuana Banking Update, 140 credit unions provided services to marijuana-related businesses as of March 2019. That’s an increase of 111 cooperatives year-over-year. Washington state legalized the recreational use of cannabis in 2012, and state-based credit unions, including Numerica, saw the need to provide safe and secure services to these businesses. Since first accepting deposits from cannabusinesses in May 2014, the credit union has built a portfolio of approximately 300 cannabis accountholders with a total balance of approximately $18 million.

Read: Collecting Cannabusiness Deposits In The Evergreen State

2018

In 2004, a sleepy little credit union on the white, sandy shores of the Gulf of Mexico woke up. The two preceding years were hard for the then $80 million NCSC Federal Credit Union, which was experiencing negative loan and membership growth, as well as declining employee morale. The credit union’s name at the time did it no favors in attracting new members. Overall, a lack of strategic vision left the credit union in a bad place financially. In the years since, strategic changes have helped the cooperative regain its footing, though there have been bumps along the way. In the past decade, the Florida credit union has faced three disasters that have altered its sense of normalcy as well as the fabric of the community it serves: the Great Recession; the 2010 BP oil spill; and, most recently, 2018’s Hurricane Michael, an epic blow from which the region is still recovering.

Read: On The Road To Resilience

$80 Million

Vantage West Credit Union has offered commercial loans since 2011 and commercial deposit accounts since 2013. Today, the credit union has a dedicated team of business bankers with enhanced training that ensures a better branch experience and an easier commercial account opening process. And the cooperative’s strategy of building relationships, not products, is paying off. According to the latest data, the credit union held nearly $80 million in commercial deposits as of March 31, 2019.

Read: 3 Ways To Ensure Commercial Services Success

61%

A few weeks ago, Forbes (alongside market research firm Statista) released its second annual listing of the Best Credit Unions In Each State. That list included many familiar faces. In fact, a full 61% of the honorees analyzing data, it’s one of the many things we do here at Callahan & Associates are clients of Callahan. These credit unions, and many other industry leaders, look to Callahan & Associates for industry insights and data analysis geared toward helping the nation’s financial cooperatives make decisions that better serve members and support organizational growth. Congratulations to all our clients on the list!

Read: A Nod To Clients And All The Credit Unions That Measure Member Value

Happy Reading!

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]]> https://creditunions.com/blogs/industry-insights/best-of-october-2018/ Thu, 08 Nov 2018 13:35:00 +0000 https://creditunions.com/blog/best-of-october-2018/ Based on October traffic (and our editorial instincts), here are the top articles and blogs that appeared on CreditUnions.com.

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]]> Based on October traffic (and our editorial instincts), here are the top articles and blogs that appeared on CreditUnions.com.

No. 10: Branch Population Holds Steady While Productivity Rises

Advances in staff and technology underpin credit union’s ability to serve more members per location, and the numbers show it.

No. 9: Bob McKay On Leadership

The CEO of Anheuser-Busch Employees Credit Union talks inspiration, role models, and finding opportunities.

No. 8: Strategic Planning Is More Than A Fall Weekend

Taking time throughout the year to discuss the credit union’s strategic direction will help leaders address changes to the landscape as they occur.

No. 7: An Incentive For Purpose, Not Employees

Affinity Plus Federal Credit Union redirects incentive payouts on ancillary loan services to contribute to foundation funding.

ContentMiddleAd

No. 6: 3 Ways To Settle Student Debt

First Tech FCU goes all in on student debt refinancing, with a suite of products and a team of in-house advisors working to meet specific needs of members.

No. 5: What’s In A Name: Director Of Business Analytics

Carrie Jenkins is leading Centra Credit Union on a new journey into predictive analytics powered by a new core processing system and data warehouse solution.

No. 4: A 4-Year Journey Into The Heart Of Analytics

St. Mary’s Bank used the power of data visualization software to introduce stronger business intelligence and analytics into the organization and into the strategic decision-making process.

No. 3: How Many Basis Points Does It Take To Keep A Member?

Fort Knox FCU is raising rates on its money market account to discourage members from taking their business elsewhere.

No. 2: The New Face Of The Front Line

It takes more than sleek teller machines to transform member experience. Tucson FCU’s transition to drive-thru ITMs required hours of planning, visits to other credit unions, a new training program, and a branch-by-branch rollout of the new machines.

No. 1: Which Credit Union In Every State Returns The Most Value To Members?

An interactive graphic by Callahan & Associates highlights ROM leaders by state. Who’s tops in your state?

The post Best Of October 2018 appeared first on CreditUnions.com.

]]> https://creditunions.com/blogs/industry-insights/member-value-front-line-changes-and-investments/ Mon, 22 Oct 2018 05:00:00 +0000 https://creditunions.com/blog/member-value-front-line-changes-and-investments/ Five can't-miss data points this week on CreditUnions.com.

The post Member Value, Front Line Changes, And Investments appeared first on CreditUnions.com.

]]> This week, CreditUnions.com looks at a credit union that provides some of the best member value the industry has to offer, another working to make ITM implementation better, and digs into second quarter data.

Here are five can’t-miss data points:

2

For more than 10 years, the Credit Union of Vermont has appeared among the chart toppers in Callahan’s Return Of The Member a proprietary metric that looks beyond CAMEL safety and soundness issues to arrive at a bottom-line number for member value. When compared against the industry’s 1,049 credit unions with $20 million to $50 million in assets, Credit Union of Vermont ranked No. 2 in the second quarter. How does the credit union rank consistently top the charts? We have the answers.

Read: Member Value In Vermont

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64%

It’s part of human nature to resist change. When that change involves the rollout of new technology, some people avoid adoption all together. As credit unions across the country roll out interactive teller machines (ITMs), how to encourage members to adopt the technology is a major consideration. They’re facing a hurdle there. According to a 2017 survey by ATM Marketplace, 64% of consumers prefer using a traditional teller window in a branch over a drive-up ITM with a remote teller on video. When Tucson Federal Credit Union rolled out ITMs to drive-thru locations last year, it was the first to do so in its southern Arizona market. That meant the credit union had to get it right this was its market and its members.

Read: The New Face Of The Front-Line

$3.4 Billion

Income from investments at credit unions hit $3.4 billion in the first six months of 2018. That’s the highest mid-year value since 2008 and is a 21.4% increase over June 30, 2017.

Read: Investments By The Numbers (2Q18)

50

The total number of credit unions dropped by 50 in the second quarter, nationally, 97.6% of the industry met the NCUA’s 7.0% well-capitalized threshold, and membership expanded 4.3%, the equivalent of 4.7 million new members. What else happened in the second quarter?

Read: Credit Union Industry At-A-Glance (2Q18)

$200 Million

Before she entered the credit union industry, Jane Dobbs gained valuable financial services and relationship-building experience through her work as a part-time teller at a savings and loan. After the S&L crisis, Dobbs worked for credit unions as well as banks and built a strong background in consumer, business, and mortgage lending. Throughout her career, she has been particularly drawn to credit unions in need of help specifically conserved credit unions and is most proud of her work rebuilding troubled organizations. Through her decades of experience in banks, thrifts, and credit unions, Dobbs has learned many valuable lessons. Now, the CEO of the $200 million Canyon State Credit Union shares some of the key lessons she’s learned through this challenging and rewarding work.

Read: Jane Dobbs On Leadership

Happy Reading!

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]]> https://creditunions.com/features/member-value-in-vermont/ Fri, 19 Oct 2018 18:16:00 +0000 https://creditunions.com/blog/news_articles/member-value-in-vermont/ Credit Union of Vermont provides some of the best member value the industry has to offer and consistently ranks among the top credit unions in Return Of The Member.

The post Member Value In Vermont appeared first on CreditUnions.com.

]]> Top-Level Takeaways

• Credit Union of Vermont has ranked at or near the top of Callahan’s Return Of The Member metric for the greater part of the past decade.

• A slim operating structure allows the institution to provide market-leading deposit and loan rates.

When asked how the Credit Union of Vermont ($47.5M, Rutland, VT) consistently provides exemplary member value, CEO Brian Fogg harkens back to his credit union’s original vision from 1958:

CU QUICK FACTS

Credit Union of Vermont
Data as of 06.30.18

HQ: Rutland, VT
ASSETS: $47.5M
MEMBERS: 3,080
BRANCHES:1
12-MO SHARE GROWTH: 4.5%
12-MO LOAN GROWTH: 8.0%
ROA: 0.93%

Eight guys from the post office didn’t get together to make a credit union for the purpose of gouging one another, says the CEO of Vermont’s 10th-largest credit. They wanted to provide good value for themselves and their members.

For more than 10 years, the Credit Union of Vermont has appeared among the chart toppers in Callahan’s Return Of The Member a proprietary metric that looks beyond CAMEL safety and soundness issues to arrive at a bottom-line number for member value.

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ROM

FOR CREDIT UNIONS $20M-$50M | DATA AS OF 06.30.18

According to Callahans Return Of The Member index, Credit Union of Vermont has historically offered excellent return to its members.

Source: Callahan & Associates.

Callahan calculates ROM using a combination of interest rates and usage. When compared against the industry’s 1,049 credit unions with $20 million to $50 million in assets, Credit Union of Vermont ranked No. 2 in the second quarter

How does the credit union rank consistently top the charts? Fogg has the answers.

A Lean, Clean Operating Machine

Operationally, Fogg aims to run a clean operating cost structure. The $50 million credit union runs one branch without a drive-thru and has posted an operating expense ratio of less than 3% every quarter since the first quarter of 2009. Long-term, Fogg would like to drive that number below 2% so he can offer his members even more.

For each dollar we are not spending on operating expense, we can afford a lower loan yield, Fogg says. Better rates on loans, a better fee structure, and higher deposit rates.

OPERATING EXPENSE RATIO

FOR CREDIT UNIONS $20M-$50M; VERMONT CREDIT UNIONS | DATA AS OF 06.30.18

By keeping its operating expenses low, Fogg aims to reapply those costs savings in member-centric ways, like better loan rates or lower fees.

Source: Callahan & Associates.

YIELDS, INCOME, AND RATES

FOR CREDIT UNIONS $20M-$50M; VERMONT CREDIT UNIONS | DATA AS OF 06.30.18

Callahan & Associates | www.creditunions.com

Key performance indicators at the Credit Union of Vermont look different than its asset- and state-based peers.

Source: Callahan & Associates.

Credit Union of Vermont derives three-quarters of its income from loans for which its yield is lower than state and asset-based peers and approximately 12.5% from fees which is higher than credit unions in the state but lower than credit unions of similar size. It’s one thing, Fogg says, for fee income to act as an important income stream; it’s another to nickel and dime.

We’re not dependent on it, and we’re not looking to maximize it, he says. Our success is not dependent on our members’ failure.

Fogg notes the credit union hasn’t raised its non-sufficient funds fee for nearly 20 years. And whereas it does charge fees to recover costs and curb abuses, its fee structure is designed to be as generous as possible.

One of the benefits of running an institution with low operating expenses is the ability to provide more competitive rates on loan and deposit products which often results in greater member usage.

The credit union has competitively priced its regular share products for its Vermont market, but it has aggressively priced its suite of certificate products. For example, the credit union’s special three-year term certificate pays 3.50% on balances up to $3,500. On its non-promotional certificates, the credit union’s four-year certificate pays 2.75% on balances up to $20,000. As of the second quarter, nearly 17% of Credit Union of Vermont’s members had a certificate with the credit union. By comparison, the average for all Vermont credit unions was 8.05%.

But lower operating expenses is not the only way Credit Union of Vermont is able to pay higher rates. It also carries a higher percentage of its earning assets as loans. As of the second quarter of 2018, Credit Union of Vermont’s loan-to-assets ratio was close to 70%. That number was closer to 50% for credit unions with $20 million to $50 million in assets.

Because the credit union carries more loans a higher earning asset than an investment it can afford to pay a better rate and earn a lower yield.

We have a lower loan yield, but our yield on assets is higher because we have a higher percentage of our overall assets in loans, Fogg says.

At midyear, the credit union’s 4.02% yield on earning assets bested both asset- and state-based peer performance.

The credit union isn’t exactly cavalier about who it lends to, either. In the second quarter, the credit union’s delinquency was 0.00%; this despite the fact the cooperative’s loan request approval rate is near 95%.

The Proof Is In The Pudding

When it comes to member value, the proof is often in the pudding. If members find value, they use the credit union’s products and services. And in these usage metrics, too, Credit Union of Vermont posts impressive performance. The credit union’s average member relationship in the second quarter, $24,000, bested the state average by approximately $6,000 and nearly doubled the asset-based average. The credit union’s usage by product is impressive, too.

Click the tabs below to view graphs.

CREDIT CARD PENETRATION

CREDIT CARD PENETRATION

FOR CREDIT UNIONS $20M-$50M; VERMONT CREDIT UNIONS | DATA AS OF 06.30.18

Historically, credit card penetration at Credit Union of Vermont has hovered at 25% or more. That’s well above state- and asset-based peer averages.

Source: Callahan & Associates.

AUTO LOAN PENETRATION

AUTO LOAN PENETRATION

FOR CREDIT UNIONS $20M-$50M; VERMONT CREDIT UNIONS | DATA AS OF 06.30.18

Auto loan penetration at the Vermont cooperative neared 24% at midyear. That’s six percentage points higher than asset-based peer average.

Source: Callahan & Associates.

SHARE DRAFT PENETRATION

SHARE DRAFT PENETRATION

FOR CREDIT UNIONS $20M-$50M; VERMONT CREDIT UNIONS | DATA AS OF 06.30.18

Share draft penetration for Vermont credit union is trending up, but Credit Union of Vermont outpaced the state average by nearly eight percentage points in the second quarter.

Source: Callahan & Associates.

We want our members to bring their business here, Fogg says. So, we have to make sure we are following through with value.

Focusing on rates brings value, but it doesn’t necessarily affect all members in the same way. To compensate for that, Credit Union of Vermont considers its fees.

I can pay 2% on a regular share account, but if a member has a balance of $100, what does that matter? Fogg says. For that person, the greatest benefit we can offer is to not charge them every possible fee we can come up with.

Fogg also says the credit union often foregoes rate increases on its variable-rate loans. For example, in January and July of 2018, the credit union could have adjusted rates on its $6.5 million home equity line of credit portfolio but declined to do so. By making that decision, Fogg estimates his shop gave up approximately $25,000 in income.

We think it’s the right thing to do, the CEO says. We take our mission statement seriously.

Offer consistent value for long enough, and members notice. It also helps differentiate his shop from other financial institutions in his market.

We say we’re constantly rated at the top for member value that gets people’s attention, Fogg says. Anybody can be a leader on any one particular day. It’s over a period that is the true measure.

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