The physical branch remains an important sales and service channel
for credit unions, despite the development of electronic means like
ATMs and Internet home banking. Branches are still the prime source
of loan originations, a crucial factor in evaluating overall credit
union performance. They also play an important role in building
relationships with current members and attracting new ones - especially
critical for credit unions with community field of membership.
Branch investment continues to grow every year. Last year, credit
unions spent over $8 billion on land and building acquisitions,
a 12% increase over 2001. This trend is expected to continue through
2003, as over half of the large (assets of $50 million or more)
U.S. credit unions responding to a recent Callahan & Associates
survey said they planned to add at least one new branch this year.
Only about 15% of respondents indicated that they planned to close
a branch by year-end. Thus, credit unions will continue to seek
cost-effective ways of improving branch performance.
Last month, Callahan & Associates initiated a research study
to discover credit union benchmarks and best practices in the area
of branch management. One of the areas analyzed by the study is
the average loan amount generated per branch employee. This figure
was calculated using a combination of 2002 year-end call report
data and information provided by responding credit unions. Based
on this data, branch-originated loans averaged about $1.14 million
per employee in 2002.
The chart below shows data on the top 5 credit union leaders, as
ranked on this measure.