Share Certificates Drive Deposit Growth in Third Quarter

Share certificate growth increased while total share growth continued to decline in the third quarter among the 831 First Look participating credit unions.

 
 
As the average cost of funds increased, total share growth among First Look credit unions continued to decline in the third quarter of 2004. However, certificate growth showed a marked increased from previous quarters, as rising market rates began to affect certificate rates. See listing of the top ten First Look credit unions in quarterly growth of certificates at the end of this article.

Third quarter share certificate growth was 5.89%, up from 1.05% in June 2004 among First Look participating credit unions. Money market share growth saw the opposite trend among participants, declining from 10.47% in June down to 6.81% in September (see graph below). The national average rates for 3-month and 1-year CDs increased by roughly 25 basis points during those same three months, according to Bankrate.com.

This data was compiled from 831 credit unions who participate in Callahan & Associates' First Look program. Through First Look, credit unions submit their call reports to Callahan and are able to get a glimpse of quarterly trends before the NCUA releases the data. Currently, First Look credit unions represent 31% of the industry's assets.

The Federal Reserve has signaled that it will continue measured increases in the Fed Funds rate, and it seems very likely that short-term interest rates will continue to rise throughout the rest of the year. Rising interest rates will affect share strategy as credit unions and competitors position deposit rates to compete in this environment.

Top 10 First Look Credit Unions* in
Quarterly Growth of Certificates
*Callahan & Associates First Look participating credit unions over $20M in assets
Data as of Sept. 2004
CU Name
ST
Quarterly Growth of Certificates
Share Certificates
Assets
1
United Nations
NY
153.34%
460,201,226
2,061,630,231
2
American River HealthPro
CA
71.78%
66,266,051
225,660,321
3
Tcc
TX
55.64%
8,708,718
28,415,704
4
Forum
IN
55.10%
155,697,552
822,568,262
5
Ctecu
TX
37.09%
8,646,337
44,579,539
6
Sea Island
GA
27.73%
9,071,343
39,823,861
7
Telesis Community
CA
24.81%
140,721,303
468,915,621
8
Portland Teachers
OR
23.56%
647,000,325
1,887,788,536
9
Capital Power
CA
23.05%
19,511,711
56,481,308
10
Mendo Lake
CA
22.31%
18,026,335
62,028,015
 

 

 

Nov. 29, 2004


Comments

 
 
 

No comments have been posted yet. Be the first one.