Q3 Report: The Healthiest Credit Unions In Peer Group 5

Top 5

This week we’re focusing on the credit unions in Peer Group 5 that sit at the top of our most recent Credit Union Industry HealthScore metric. These “Top 5” institutions show an impressive ability to drive membership growth while maintaining above-average loan and deposit relationships. Read on for details.

Defining Health

We utilized our Credit Union Industry HealthScore, a composite financial performance score reflecting credit union financial health, to identity the Top 5. The HealthScore system calculates overall credit union health by scoring/grading credit union performance across eleven different key ratios: Net Worth, ROAA, Operating Expense, Efficiency, Charge-Off, Delinquency, Loans, Deposits, Loan-to-Share, Asset Growth, and Membership Growth. Grading is based on a five-point scale, with 0 reflecting poor health and 5 reflecting exceptional health. Glatt Consulting publishes the score quarterly and we use it to track, report on, and respond to industry-wide trends affecting credit unions. The overarching score allows us to quickly define credit unions with very balanced, strong, financial performance, and the component scores help us to identify contributing factors driving that performance.

The Top 5

Peer Group 5, which is defined as credit unions with assets from $100M up to $499M, is comprised of 1,056 credit unions with combined assets of $233B in assets. This equates to 16% of the total number of credit unions and 21% of total credit union assets. Considering its size it is critical to the health of the credit union community overall that Peer Group 5 credit unions remain healthy.

Here are the five healthiest credit unions in Peer Group 5, and also the HealthScore averages for the industry and for Peer Group 5 overall.

Top Five Healthiest Credit Unions
Name Location Assets HealthScore
Top 5 Average 4.382
Peer Group Average 3.070
Industry Average 2.527
Oklahoma Oklahoma $109M 4.545
State Employees New Mexico $396M 4.364
Day Air Ohio $289M 4.364
Northeast Community Tennessee $102M 4.364
St. Paul Minnesota $132M 4.273

As noted, the table above includes average scores for the peer group and for the industry overall. Peer Group 5 generally outperforms the industry as shown in the comparison averages, but the five credit unions leading Peer Group 5 possess a greater degree of health than even their industry-leading peers. The table below sheds some light on Top 5 health drivers.

Score Comparisons
Credit Union NW RA EX EF CO DQ LN DE LS AG MG
Industry 3.411 1.935 2.883 0.983 3.288 2.952 2.942 3.745 2.477 2.067 1.119
Peer Group 3.395 2.616 2.849 1.223 3.734 3.570 4.146 4.717 3.347 2.532 1.643
OKLAHOMA 5.000 5.000 3.000 4.000 4.000 4.000 5.000 5.000 5.000 5.000 5.000
STATE EMPLOYEES 5.000 5.000 3.000 2.000 5.000 5.000 5.000 5.000 5.000 5.000 3.000
DAY AIR 5.000 5.000 3.000 3.000 5.000 5.000 5.000 5.000 5.000 3.000 4.000
NORTHEAST COMMUNITY 5.000 5.000 4.000 3.000 5.000 5.000 5.000 5.000 5.000 3.000 3.000
ST. PAUL 5.000 5.000 3.000 3.000 5.000 4.000 5.000 5.000 5.000 4.000 3.000

Table Key:

  • NW: Net Worth performance score
  • RA: Return on Average Assets performance score
  • EX: Operating Expense performance score
  • EF: Efficiency performance score
  • DQ: Delinquency performance score
  • CO: Charge-Off performance score
  • LN: Loan Relationships performance score
  • DE: Deposit Relationships performance score
  • LS: Loan-to-Share performance score
  • AG: Asset Growth performance score
  • MG: Membership Growth performance score

The table above illustrates an interesting difference between the Top 5 and the rest of Peer Group 5. While all credit unions in the peer group tend to have a healthy level of member loan and deposit relationships, the Top 5 maintains the level of member relationship while also maintaining strong membership growth. In other words, these credit unions seem to have a knack for converting new members into full-fledged account holders – a skill not every credit union possesses.

As we have done in previous posts regarding industry leaders,  we included links to each credit union in the first table. We encourage you to check them out … and note, as we have, that for some the competitive advantage driving such substantial performance is not due to industry-leading website design. We offer that as proof that putting your resources into the channels that nurtures relationships with your members and potential members is more important that whether you are online with the prettiest design.

We’d also like to note the impressive performance of GC client St. Paul Federal Credit Union. Congratulations!

Interested in your own credit union’s HealthScore? We offer custom reports for a nominal charge. Order your report today

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s