Credit Union HealthScore Update: Q1 2013

The Glatt Consulting Credit Union Industry HealthScore has been updated to reflect credit union performance data from the first quarter of 2013. The latest score calculation is 2.446, an improvement over Q4 2012’s 2.339. Additional score details and trends are included in this post.


The Glatt Consulting Credit Union Industry HealthScore rose to 2.446 from Q4 2012’s 2.339, but the updated score represents a -.71% change over the same period the prior year – the first such period-over-period decline since Q4 2010.

Glatt Consulting’s HealthScore is based on a 0-5 scale, with 0 being very unhealthy and 5 being extremely healthy. To arrive at the industry score, Glatt Consulting first calculates credit union industry health in eleven different critical financial measurements, including net worth, return on assets, efficiency, expense management, credit quality (through delinquencies and chargeoffs), member relationships (through member deposits and loans), loan to share, and membership and asset growth. These individual component scores are then aggregated into the composite industry score.

General Score Trends

The chart below includes both HealthScore data (collected since 2001) and total credit union data. The red line tracks industry HealthScores, the gray bars total credit unions. Note: click on this or any other chart to enlarge the image.

HealthScore and Total Credit Unions
HealthScore and Total Credit Unions

The chart below illustrates the total number of credit unions within each scoring range, with totals subdivided by credit union peer group.

HealthScore Distribution
HealthScore Distribution

For reference, peer groups are defined as follows:

  • Peer Group 1: Assets less than $2,000,000
  • Peer Group 2: Assets from $2,000,000 to less than $10,000,000
  • Peer Group 3: Assets from $10,000,000 to less than $50,000,000
  • Peer Group 4: Assets from $50,000,000 to less than $100,000,000
  • Peer Group 5: Assets from $100,000,000 to less than $500,000,000
  • Peer Group 6: Assets $500,000,000 or more

Prior Quarter Score Comparisons

Drivers for the improvement of the score over Q4 2012 include asset and membership growth as well as member deposit relationships and loan delinquency, though these types of improvements tend to be seasonal due to common credit union business practices (e.g., many credit unions purge dormant accounts in the 4th quarter making the following quarter growth appear more substantial by comparison).

The table below illustrates the percent change in HealthScore from the prior quarter. Red boxes indicate score declines from the prior quarter.

HealthScore %Change :: Prior Quarter
HealthScore %Change :: Prior Quarter

 

Same Period Prior Year Score Comparisons

Lower scores for asset and membership growth as well as return on assets and credit union efficiency are driving the score declines from the prior period, Q1 2012. While assets and membership grew in the first quarter of this year, growth was simply not as strong as what was recorded in Q1 2012. In addition, fully 30% of all credit unions had either 0 net income or suffered losses in the first quarter, which is the root cause of the comparative declines in both return on assets and efficiency scores.

The chart below illustrates the percent change in score from the same period the prior year. Note that points below 0 reflect score declines over the same period the prior year, and points above 0 score improvements.

HealthScore %Change Prior Period
HealthScore %Change Prior Period

The table below illustrates the percent change in HealthScore from the same period the prior year. Red boxes indicate score declines from the prior period (Q1 2012).

HealthScore %Change :: Prior Period
HealthScore %Change :: Prior Period

 

Small vs Large Credit Union Score Comparisons

In keeping with past trends, smaller credit unions reflect lower health scores than larger credit unions.

Peer Group HealthScores
Peer Group HealthScores

 

State Health

A new set of data calculated this quarter looks at credit union HealthScores on a state-by-state (and US territory) basis. Twenty states and one territory show scores less than the industry average, as illustrated in the chart below.

HealthScore Averages by State
HealthScore Averages by State

The following chart illustrates the health of credit unions by state. Large green dots define the healthiest states relative to other states. Red dots define less healthy states.

Q12013 State Health
Q12013 State Health

 

Questions/Comments

Have questions? Interested in additional data? Use the comments form below to let us know. You may also schedule an appointment to discuss scores in greater detail, including scores for your own credit union.

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