Total income per employee has grown 4.9% over the past 12 months to $221,027. From an expense perspective, total non-interest expenses reached $20.5 billion at mid-year. That’s a 6.3% increase from 2016 and a 25.6% increase from five years ago.
Employee compensation, the largest component of non-interest expenses, accounted for 51.5% of all operating expenses. To retain top talent, credit unions on average spent $73,286 per employee in salaries and benefits in second quarter 2017 — that’s up 3.3% from second quarter last year.
Auto loan penetration expanded 1.06 percentage points annually to top 20.0%, showing that credit unions are increasingly extending auto credit. As more members turn to credit unions to finance their vehicles, however, maintaining sound asset quality is imperative for sustainable growth. The industry’s auto loan delinquency increased 1 basis point annually; auto loan net charge-offs increased 7 basis points year-over-year.
The credit union share of the auto finance market nationally increased 1.4 percentage points annually and hit 18.9% in the second quarter of 2017. Despite softening sales in the auto market, credit unions are not skipping a beat when it comes to meeting the vehicle financing needs of members.
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Producing Innovative People And Products
Virginia Credit Union | Richmond, VA | Assets: $3.4B | Members: 262,178
Virginia Credit Union has undertaken a hiring surge to find top talent that will help lead the credit union into new areas of innovation.
Chris Saneda, executive vice president and chief information officer, says VACU budgeted 100 new positions in the past two years to support overall operations, particularly focusing on new levels of productivity in mortgage lending and digital engagement.
“We have great confidence that the combination of three disciplines — data, process, and innovation — will lead us down a path of creating engaging experiences for our members,” president and CEO Chris Shockley says. “Our staff has already worked in harmony to produce a pilot mortgage app that has reduced errors and taken four full days off the mortgage process.”
Indeed, shifting its focus to first mortgages has helped VACU double its mortgage business. And 77% of its checking account holders actively participate in online banking, 35% are active in the mobile channel.
The process component includes addressing specific business project needs ranging from a better understanding of operational capability to creating a smarter next-best-product model.
“We’re using design theory and Lean Six Sigma with our current projects because they bring direct value to enhancing efficiency and removing barriers,” Saneda says.
There’s also an innovation team that concentrates on ideation, creation, and evaluation.
“We’ve asked them to focus on a small number of initiatives so they can quickly identify the right areas for investment,” the EVP says. “They’re guided by a crossfunctional team with leaders from technology, products, and marketing.”
Importantly, the effort to create new products and processes includes giving some leeway.
“Because the innovation team’s approach differs significantly from our traditional practices, they’re not subject to the rigor we customarily put forth,” Saneda says. “The intent is to try new ideas and assess what we can integrate into mainstream practices … to introduce leap-frog capabilities for our members that we might otherwise not consider.”
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