U.S. Credit Unions Capture Major Deposit Market Share In 2013

Deposit market share has increased in 30 states over the past year.

 
 

One way to evaluate a credit union’s branch performance is to compare its deposits and deposit growth rate against area peers. These metrics reflect the depth of member relationships as well as a credit union’s ability to gain market share. Equipped with this data, credit union executives can benchmark their branches’ market performance more effectively and easily.

Credit unions nationwide captured 8.93% of total U.S. deposits as of June 2013, with market share increasing in 30 states over the past year. The top 10 states with the largest 12-month growth in deposit market share represent a wide geological distribution. For example, Rhode Island had the largest year-over-year change in deposit market share at 432 basis points. Oregon came in second with a 244-basis-point increase in deposit market share over the same period.

TOP 10 STATES BY LARGEST GROWTH IN DEPOSIT MARKET SHARE
Data as of June 30, 2013 For All Credit Unions
© Callahan & Associates | creditunions.com

  State Change In Basis Points Deposit Market Share as of June 2012 Deposit Market Share as of June 2013 Number of Branches as of June 2013
1 Rhode Island 432 7.7% 12.0% 77
2 Oregon 244 17.2% 19.7% 311
3 Alaska 154 31.9% 40.6% 103
4 Iowa 121 11.1% 12.4% 327
5 Wisconsin 113 13.7% 14.8% 656
6 Vermont 108 18.9% 20.0% 83
7 Idaho 68 17.9% 18.6% 193
8 New Hampshire 62 14.1% 14.7% 103
9 Oklahoma 51 11.6% 12.1% 249
10 Tennessee 44 11.2% 11.7% 528


Source: Callahan & Associates’ Peer-to-Peer Analytics

Among all states, Alaska’s credit unions with a total of 103 branches captured the highest deposit market share as of June. More than 40% of total deposits in Alaska were held at Alaska’s credit unions. New Mexico and Washington ranked second and third with 21.3% and 21.0% in deposit market shares, respectively. The map below shows the deposit market share of each state as of June 2013 and depicts four different quartiles based on the size of deposit market share. Many northwestern states posted higher market shares than other states, and their numbers are even more compelling in that these states together saw a full percentage point decrease in the total number of branches over the past year. 

U.S. MAP: DEPOSIT MARKET SHARE BY STATE
Data as of June 30, 2013 For All Credit Unions
© Callahan & Associates | creditunions.comU.S._MAP_DEPOSIT_MARKET_SHARE_BY_STATE

Source: Callahan & Associates’ Peer-to-Peer Analytics

Although the absolute amount of deposits nationwide has steadily increased, the annual growth rate has generally decreased over the past several years. This is primarily due to a historic low rate environment and accompanying low yield on deposits. Because of persistent economic uncertainty and a preference for liquidity, consumers continue to flood financial institutions with deposits; however, the pace at which they are saving money has slowed from to the levels seen during the recession. Such activity demonstrates rising consumer confidence among a U.S. economy that is showing signs of recovery.

ANNUAL DEPOSIT GROWTH OVER A 5-YEAR PERIOD
Data as of June 30, 2013 For All Credit Unions
© Callahan & Associates | www.creditunions.com

ANNUAL_DEPOSIT_GROWTH_OVER_TIME

Source: Callahan & Associates’ Peer-to-Peer Analytics

The spread between all FDIC-insured institutions and credit unions’ annual deposit growth rates have tightened over the past two years. As of June 2013, the two groups of financial institutions differed by only 71 basis points compared to 2.9 percentage points in June 2011.

HISTORICAL ANNUAL DEPOSIT GROWTH COMPARISONS
Data as of June 30, 2013 For All FDIC-insured Institutions and Credit Unions
© Callahan & Associates | www.creditunions.com

HISTORICAL_ANNUAL_DEPOSIT_GROWTH_COMPARISONS


Source: Callahan & Associates’ Peer-to-Peer Analytics
* Annual deposit growth rates for all FDIC-insured institutions refer to growth rates for deposits held in domestic offices only

Total deposits at credit unions increased by $41.1 billion — or 4.7% — annually to reach $921.5 billion as of June 2013. Core deposits, which are a primary indicator of the level of relationship a credit union holds with its members, fueled the growth in total deposits. Regular shares increased 9.7%, money market shares increased 5.5%, and share drafts increased 8.6%. As of June 2013, share draft accounts — which are the most significant indicator that the credit union is a member’s primary financial institution — increased 5.3% annually, more than doubling the credit union membership growth posted during the same period.

The ability to keep up-to-date with industry performance trends and know how well a credit union and its local competitors are performing in the market is essential for a credit union’s long-term success. Credit unions with the right set of data on hand can more strategically assess a branch’s operational strengths and weaknesses. Callahan & Associates’ Branch Analyzer, an online market share and performance analysis tool built into Callahan's Peer-to-Peer, helps credit union professionals identify local competitors and analyze their market share and performance from the state level all the way down to the branch level.

 

 

 

Oct. 11, 2013


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