The Power of Data: Credit Union Deposit Market Share Growth

Credit unions experienced significant share growth over the last 12 months. But how will this affect deposit market share?


In times of financial uncertainty, it is easy to get carried away by feelings of fear and doubt. While your credit union's stability should be the foremost thought in your mind, only looking internally can often result in a skewed sense of your performance. It is important to benchmark yourself against other financial institutions in your market so that you can evaluate yourself against your competition.

While credit unions have been significantly impacted by the financial crisis and NCUSIF stabilization plan, it would be imprudent not to look closely at their performance relative to the banks and thrifts. As of June 30th, 2008, the most current branch deposit data released by the FDIC, credit unions held 8.9% of the nation's deposits. This figure remained largely unchanged from 8.8% in 2007.

The credit union industry has expanded its national market share over the last year experiencing a 12-month share growth of 8.31% from 1Q 2008 to 1Q 2009, while banks and thrifts have only experienced a 12-month share growth of 6.63% over the same time period.

One possible reason for such strong growth is due to members' response to the financial uncertainties of the last year and a half. The falling stock market, bank failures, and continuing economic instability resulted in a consumer flight to safety and quality. In early 2008 the average U.S. savings rate skyrocketed from nearly 0%, to 4.2%. But how much have recently well-publicized bank woes contributed to the superior share growth rate of credit unions? This is impossible to accurately quantify, but you can reasonably assume that recent consumer backlash against banks has played a small role.

Share Growth by State

While the movement as a whole is performing well relative to banks and thrifts, credit unions in each state have had varied success capturing significant market share in their respective states. As of the end of June 2008, some states had only a slight market presence (market share in Delaware was only .7%), while credit unions were strong players in other states (market share in Alaska, Hawaii, and Virginia were all over 20%).

Although 2009 state deposit market share cannot be calculated until the FDIC releases the data in September, examining state deposit growth for the last 12 months can help us gauge relative state performance in the interim period. The map above displays the rate of share growth between 1Q 2008 and 1Q 2009:

  • Despite the financial crisis every state experienced share growth over the last 12 months including the "sand states," which have been particularly ravaged by economic woes.
  • Twenty three states experienced growth of over 10% during the last year.
  • Three of the five states in which credit unions have the lowest deposit market share experienced growth of 8% or higher (South Dakota, Arkansas, and New Jersey).

Your Market

While this information may be interesting, it is difficult to apply these high level trends to the individual strategic decisions at your credit union. However, performing an exercise that allows you to drill down into your local market can be quite useful. Following local trends in share growth and market share growth can help put your credit union's "big picture" into perspective. If you are interested in learning more about evaluating your local market and benchmarking your credit union's deposit performance, sign up for our upcoming complimentary webinar, "Unleash the Power of Data for Better Decision Making Special Focus: Deposits."