1Q18 Data Shows More Members And Better Product Penetration

Positive net member growth and product penetration paint a pretty picture of the credit union movement’s progress.

 
 

The credit union industry continued to add members at a record pace in the first quarter of 2018. Strong performance in other metrics indicate members are deepening their engagement with their cooperatives as well.

Credit union membership nationwide increased 4.3% in the first three months of 2018. That’s close to the same percentage growth recorded one year ago; however, because the base was larger to begin with going into the year, the industry set another new record by the end of the quarter. The 1.4 million net new members in first quarter 2018 was the highest yet recorded for the first three months of a year.

That’s on par with the highest net new member surge reported in one quarter, which is 1.4 million in the third quarter of 2016. What makes this especially notable is the fact first quarter is typically a slower period for member growth. The second and third quarters are periods during which auto lending, a major driver of member growth, tends to be higher.

 

 

Half Up, Half Down

There were 5,646 credit unions nationwide at the end of the first quarter. No metric was evenly spread among them, either by individual institution, by asset band, or by geography.

That said, member growth does stand out. Membership increased at 49.1% of U.S. credit unions in the past 12 months. It dropped at 49.9% and stayed the same at 1%. 

Three of the five NCUA regions — Western, Mid-Atlantic, and New England reported higher member growth than the 4.3% industry average in the first quarter of 2018. The Central and Southeast regions lagged; however, the Central Region did record faster member growth than in 2016. The Central and Western regions were the only two to do so. 

All five regions have reported positive growth every year for at least the past five years. Further, that growth has occurred across most asset sizes. Although credit unions with less than $100 million in assets struggled as a group, credit unions in four asset bands and in all five regions recorded positive member growth. 

REGIONAL MEMBER GROWTH BY ASSET CLASS

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.18

Member growth rates varied by both asset size and region.

Is Your Membership Growing, Too?

Credit union membership nationwide increased 4.3%. It takes seconds to pull data comparing your credit union’s member metrics versus local and national peers in Callahan’s Peer-to-Peer. Let us show you how.

Learn More

How Engaging

Average member relationship (AMR) is a key measure of engagement. The metric basically adds together loans and shares and divides that sum by the number of members. All in all, it’s a straightforward, powerful way to look at how much business member-owners are conducting with their credit unions.

The national AMR at the end of first quarter 2018 was $18,581  that’s up $506, or 2.8%, from the $18,075 recorded in the first quarter of 2017.

By region, the highest AMR recorded in the first quarter was $21,113 by the 686 credit unions in the Western Region. A growing market share for mortgages and sky-high real estate prices are likely contributors there. By contrast, the lowest AMR recorded was $16,558 by the 1,177 credit unions in the Southeast Region. That’s nearly 25% less than the regional leader.

PRODUCT PENETRATION

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.18

First quarter data shows relationships with members continued to deepen.

Share draft penetration  "checking accounts" in layman’s terms  are considered the best indicator of whether a credit union is a member’s primary financial institution. The penetration rate for share drafts has risen 5.60 percentage points  or 10.8%  in the past five years. That includes a jump of 82 basis points in the past 12 months.

The penetration rate for share draft accounts was higher than for any other product. Auto loan penetration came in second at 20.6% as of March 31, 2018. That was up 0.92 percentage points over the year prior. Credit card penetration also rose. Mortgage penetration, perhaps the toughest nut to crack with all the competition from banks and non-banks alike, has remained steady for the past five years.

Overall, positive growth across the varied metrics and regions shows how American consumers are increasingly using the products and services of their member-owned financial cooperatives.

This article initially ran in Credit Union Times in June 2018. Data has been updated to reflect first quarter 2018 filings.

Want more credit union strategies? Sign up for the CreditUnions.com free newsletter.

 

June 18, 2018


Comments

 
 
 

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