New Peer Groups Provide More Relevant Comparisons

Credit union consolidation and strong growth has led to a rising number of larger credit unions. Due to these increases, Callahan & Associates has reevaluated their standard peer groups to better segment credit unions and enable more relevant performance comparisons.

 
 

Credit union consolidation and strong growth has led to a rising number of larger credit unions. Due to these increases, Callahan & Associates has reevaluated their standard peer groups to better segment credit unions and enable more relevant performance comparisons.

Previously the top peer group was all credit unions over $250 million in assets. However, since that peer group was designated, the number of credit unions over $1 billion in assets has grown significantly, and now 82 credit unions occupy that space.

Credit unions above $1 billion can better utilize economies of scale to run highly efficient and productive operations. This has enabled those credit unions to separate themselves and set a higher standard for performance. As such, credit unions between $250 million and $1 billion in assets should not necessarily consider these larger credit unions their true peers, and the two groups were separated.

The other peer groups affected by the re-segmentation were the two smallest peer groups, those under $1 million in assets and those between $1 million and $2 million. Because these smaller credit unions experienced the bulk of the industry's consolidation, they were combined.

The table below displays the new peer group segments and some key performance measures. As can be seen, the performance differs greatly depending on the asset size of the group. This new segmentation will be prevalent in all 2004 publications, beginning with Callahan's 2004 Credit Union Directory which is currently in production.

 

 

 

Sept. 1, 2003


Comments

 
 
 
  • It is about time ( from a $650 Million CU)! When will NCUA do the same?
    Anonymous
     
     
     
  • Great idea. Thanks for the statistical summary.
    Anonymous
     
     
     
  • The chart confirms the fact that small credit unions will have a tough time surviving for three reasons. 1. The constant increase of regulation that overwhelms the capability of small credit unions to comply with. 2. The lack of resources to provide the electronic and physical delivery systems members want and need. 3. The lack of resouces to hire the qualified staff to do 1 and 2. I see accelerated consolidations in the future and maybe a restructuring of our political, trade association and regulatory environment.
    Anonymous
     
     
     
  • THIS CHART SAYS IT ALL!!!!!
    Anonymous
     
     
     
  • I guess we better hurry and reach the billion dollar milestone so we can reap the benefits of economies of scale in the area of expenses, increase our ROA and improve our delinquency position. The trendline for credit unions' expenses as you move from smaller to larger, and the magnitude of the delta, would clearly seem to indicate there is value in creating the added asset size group for peer comparisons.
    Anonymous