Go North Young (Wo)Man

FirstLook data for 2Q shows impressive growth and stability in the Great Plains states.


In 2006, the New York Times ran an article about North Dakota entitled “Not Far From Forsaken.” The article highlighted the steady exodus from the area over the past few decades and featured images of distressed residents, empty towns and, desolate streets. State leaders were so desperate they’d even rekindled a kind of modern-day Homestead Act to entice people to move back to North Dakota.

But time heals all wounds, and North Dakota (3.8%), South Dakota, (4.5%) and Nebraska (4.9 %) now boast some of the lowest unemployment rates in the nation.

In May, the Times offered a pictorial representation of these truths. Its unemployment map shows a swath of light tan – which indicates the lowest unemployment rate – starting at northern Oklahoma and proceeding north through Kansas, Nebraska, and the Dakotas.

What’s responsible for the turnaround? Some would argue the change did not occur in the heartland but rather in the rest of the country. Without the “boom and bust” economic temptations popular in the coastal states, financial institutions in the Plains maintained an even keel on risk and responsibility that brought them through the recession unscathed.

One example of this Great Plains sensibility is SAC Federal Credit Union ($453M, Bellevue, NE). According to Callahan’s Peer-to-Peer software, SAC grew its assets more than 20% year-over-year in 2Q 2010 and achieved an ROA of 0.89% before any stabilization expenses. The credit union grew its loans 14.77% year-over-year, while its delinquency has dropped to 0.37% from 0.54% at year-end 2009. Shares also jumped 28% year-over-year. Because of the resultant stability, SAC has increased its marketing efforts, opened branches, and formulated programs to help members hit by the recession, says Jackie Boryca, vice president of marketing at SAC.

The stalwart Western Cooperative Credit Union ($205M, Williston, ND) grew its assets and shares by double-digit percentages (17.96% and 19.91% year-over-year, respectively). It grew loans (including agricultural loans) by 9.97% total, which is more than twice the average value for its peers, and maintained a charge-off rate of less than 1%.

Solid underwriting, healthy economic circumstances, and adherence to a community-first mentality has paid off for many Great Plains financial institutions. The mentalities and actions of area credit unions have made for relatively fertile economic times.