Earnings and Expense Leaders

Margins are tight and ROA is falling for the industry. Find out which credit unions are beating the odds.

 
 

Credit union industry assets grew 6.7% in 2004 to reach $661.8 billion, a slowdown from 10.2% growth in 2003. The industry’s operating expense to average asset ratio fell two basis points to 3.21%. However, during the same period net interest margin has declined from 3.42 percent to 3.32 percent resulting in the industry’s ROA declining eight basis points to 92 basis points. Below are the credit unions over $50 million in assets that led the field in Operating Expense Ratio and ROA.

More leader tables are available in Callahan's Financial Yearbooks and Quarterly Reports.

Operating Expense Ratio

CUs over $50M as of December 31, 2004

 

 

 

 

12-month

 

 

 

 

 

Oper Exp/

Oper Exp

Assets per

 

Rk

ST

Credit Union

Ave Assets

Growth

Employee

Assets

1

NJ

Merck Employees

0.45%

7.48%

$40,102,327

$1,082,762,822

2

AL

APCO Employees

0.50%

3.41%

$21,909,773

$1,215,992,416

3

NY

Lufthansa Employees

0.54%

-16.98%

$19,572,032

$68,502,113

4

IL

Air Line Pilots Association

0.61%

2.11%

$19,919,081

$139,433,568

5

CT

Connecticut State Employees

0.64%

5.40%

$15,264,304

$1,060,869,112

6

GA

AFLAC

0.72%

5.63%

$12,805,946

$128,059,455

7

IL

Alliant

0.74%

11.28%

$18,460,560

$4,467,455,506

8

ND

Community

0.77%

2.71%

$8,339,368

$112,581,469

9

CA

STAR One

0.79%

8.14%

$21,661,077

$2,870,092,680

10

MT

Whitefish

0.80%

16.33%

$10,677,638

$613,964,179

11

HI

McBryde

0.81%

6.22%

$13,676,671

$54,706,683

12

CA

California State & Fed Emp #20

0.84%

3.91%

$10,352,140

$93,169,260

13

OH

Firestone

0.85%

-2.13%

$13,109,994

$209,759,908

14

CA

Long Beach Firemen's

0.89%

4.09%

$11,570,889

$127,279,777

15

CA

San Joaquin Power Employees

0.90%

-2.56%

$16,437,151

$98,622,905

16

PA

C-B-W Schools

0.92%

3.53%

$8,550,183

$81,226,743

17

TX

El Paso Corporation

0.92%

6.48%

$8,774,278

$96,517,056

18

LA

Coastland

0.92%

6.77%

$11,004,534

$82,534,005

19

CA

Aerospace

0.95%

3.18%

$15,595,367

$249,525,869

20

CA

Long Beach City Employees

0.96%

-5.58%

$10,930,709

$295,129,135

21

NY

N C P D

0.98%

15.60%

$22,512,984

$303,925,285

22

CA

Caltech Employees

1.01%

12.92%

$11,870,805

$724,119,087

23

AL

Railroad

1.06%

4.45%

$9,953,559

$94,558,812

24

MA

Polish National

1.11%

10.81%

$7,352,414

$330,858,617

25

DC

IDB-IIC

1.15%

6.18%

$10,492,341

$267,554,684

Averages for 25 credit unions:

0.76%

8.23%

$16,716,359

$594,768,046

Totals for 25 credit unions:

0.76%

8.23%

$16,716,359

$14,869,201,146

 

Return on Assets

CUs over $50M as of December 31, 2004

 

 

 

 

12-month

 

 

 

 

 

 

Net Income

Net Interest

 

Rk

ST

Credit Union

ROA

Growth

Margin

Assets

1

NY

Progressive

3.82%

-0.12%

5.18%

$279,722,120

2

NY

Central

3.57%

246.36%

3.94%

$74,866,940

3

GA

Wellstar

3.52%

316.28%

6.82%

$52,028,383

4

IN

CommunityWide

3.51%

60.97%

6.43%

$193,663,691

5

MA

Brotherhood

3.43%

445.35%

2.41%

$109,435,252

6

MD

Prince George 's Employees

2.89%

85.45%

4.62%

$72,889,124

7

OK

Oklahoma Educators

2.70%

203.99%

3.35%

$53,784,485

8

MI

United

2.60%

13.89%

4.68%

$195,531,159

9

WA

Whatcom Educational

2.58%

-10.42%

4.97%

$359,851,728

10

AR

Telcoe

2.53%

-8.72%

3.54%

$153,054,880

11

CA

High Desert

2.48%

46.99%

4.51%

$133,321,281

12

MI

Elga

2.45%

45.12%

4.52%

$169,434,383

13

DE

Delaware

2.41%

25.97%

5.11%

$136,754,409

14

MI

Forest Area

2.39%

32.03%

5.02%

$56,519,179

15

GA

Doco Regional Employees

2.38%

135.57%

4.91%

$57,687,631

16

OR

Old West

2.37%

52.24%

6.21%

$67,464,211

17

MI

First Community

2.36%

80.28%

3.47%

$273,539,127

18

FL

Florida Commerce

2.36%

13.34%

4.89%

$230,674,990

19

TX

Security 1st

2.35%

56.63%

4.10%

$157,535,758

20

PA

C-B-W Schools

2.33%

4.33%

2.85%

$81,226,743

21

MO

Midwest United

2.28%

63.37%

5.03%

$143,839,350

22

AL

University Federal

2.27%

47.16%

3.31%

$186,271,643

23

OH

St. Paul Croatian

2.26%

82.52%

3.10%

$119,095,335

24

MI

Consumers

2.25%

48.80%

4.40%

$142,697,980

25

NJ

102

2.24%

76.74%

4.43%

$74,536,005

Averages for 25 credit unions:

2.66%

35.42%

4.47%

$143,017,031

Totals for 25 credit unions:

2.87%

35.42%

4.47%

$3,575,425,787

 

 

 

April 18, 2005


Comments

 
 
 
  • You are correct about these credit unions being unusual. However, while we recognize these are unusual credit unions and will have unusual financials to boot, we want to exhibit the top performers to start the brainstorming process about how other credit unions can change their business plans and ideologies to become top performers in comparison to the industry average. If we only published the industry's averages, it might not stimulate alternative thoughts on changing current behaviors. Tom Geggel, Callahan & Associates
    Anonymous
     
     
     
  • The problem with this type of list is that these are unusual credit unions. I think if you would show this same data for the top 100 credit unions you would see a completely different picture. A net interest margin of 4.47 is unusually high and operating expense ratios of .76% a very low. The issues for many of us credit unions in the norm is that our spreads are barely covering operating expenses. Auto lending is starting to feel a lot like being in the airline business. Everyone is cutting their prices, often below cost to hold on to or increase volumes. The credit card business has largely been ceded to the mono-lines. Business lending is catching on but only for a few credit unions. For many credit unions most of 2004's lending success came from real estate lending. The question is will real estate lending bring on interest rate risk problems if rates rise?
    Anonymous
     
     
     
  • I agree with the discussion that they are the exception. The community based credit unions have a totally different set of costs that single seg credit unions do not have to deal with. Also, one year's worth of data is also misleading. How many of these ROA leaders would be on the same list as a list using a 5 year time period?
    Anonymous