The Benefit Of State-Level Performance Analysis

A focused peer group comparison yields sharp insight.


Comparing your credit union’s performance to national averages can be a helpful way to benchmark performance, but there are situations in which your analysis would benefit from a more specific peer group. A great way to start is by comparing your performance to the averages reported by other credit unions in your state.

The most obvious benefit to conducting state-level analysis is it provides amore accurate picture of your credit union's market.

For example, if you were a Nevada-based credit union that was trying to gain a better understanding of your loan portfolio’s delinquency, comparing yourself to the national average might not be the best way to determine your standing in the market. In September, credit unions in Nevada reported a 5.71% delinquency rate; 80% of credit unions in the state reported a higher rate of delinquency than the national average of 1.76%. A national comparison does not fully take into account that Nevada currently has the highest overall unemployment rate, and credit unions in the state are facing different economic challenges than credit unions in an area such as the Dakotas.

The Nevada example might be extreme, but external factors such as state unemployment levels, median incomes, education level, and home prices do influence a credit union’s performance. And these issues don’t just affect loan delinquency; numerous metrics, from loan origination levels to office occupancy expenses, can vary widely from state to state.

To better illustrate the point, the table below compares national averages on a number of key performance metrics to the averages reported by the 74 credit unions headquartered in the state of Oklahoma. As you can see, credit unions in Oklahoma reported values that are above certain national averages but below others. By narrowing your comparison field, you can identify opportunities and challenges in your own market.