A Flint Branch, Loan Participations, And 2018 Mergers

Five can't-miss data points this week on CreditUnions.com.

 
 

This week, CreditUnions.com shows how the fourth try was the charm for one credit union looking to build a branch in Flint, MI, takes stock of the rise in loan participation activity, contextualizes 2018 mergers, and more.

Here are five can't-miss data points:

4th

ELGA Credit Union is banking on the fourth try being the charm. Three earlier efforts to open a branch in downtown Flint didn’t pan out, but this time ELGA is already seeing its investment bear fruit in one of America’s most iconic Rust Belt cities. The new facility occupies retail space that had been abandoned for more than 20 years as the birthplace of General Motors went through a prolonged era of decline and decay, but already has become an integral part of the revived business district. 

Read: How ELGA Went All In On Downtown Flint

$31.6 Billion

Credit unions have a long history of working together, and the rise in loan participation activity in the past decade shows that willingness to collaborate writ large. The movement’s portfolio of purchased participations at year-end 2018 stood at $31.6 billion, nearly triple of that at the end of 2009. The appeal is simple: participation loans allow lenders to partner with other lenders to reduce risk exposure and increase profits. They help free up capacity, increase liquidity, and reduce concentrations.

Read: Loan Participations: Sharing Risk And Reward

Seven Hours

The drive from Santa Ana to Pleasanton, CA, takes just about seven hours. Erin Mendez knows this because she made the drive nearly six years ago, when she left her post as chief operating officer at SchoolsFirst Federal Credit Union to take over the CEO role at Patelco Credit Union. Before the opportunity arose, Mendez aspired to lead. Just not as CEO. She worked in thrifts and savings banks before joining the credit union industry, where the head leader, to her, was not the CEO. It was the chief operating officer. But when she got to credit unions, she changed her mind. She came to realize that the CEO role was one in which she could affect the most change. And when she took the reins of Patelco in 2013, the opportunity to affect change was immediate.

Read: How A New CEO Watered The Garden And Watched Her Credit Union Bloom

194 Mergers

In 2018, the long-term trend of credit union consolidation continued; still, cooperatives saw strong financial growth as membership expanded to record levels. The credit union industry underwent 194 mergers over the calendar year, bringing the institution count at year-end to 5,492. Ten years ago, 7,697 institutions operated throughout the U.S. and despite 2,205 fewer credit unions in 2018, membership has soared 31.0%. In the midst of financial crisis and the aftermath of the Great Recession, American consumers turned to member-owned financial cooperatives in record numbers for their not-for-profit, member-focused business model.

Read: The Movement’s Mergers Continued In 2018

35 Basis Points

For much of 2019, it appeared that U.S. and Chinese officials were close to reaching a comprehensive trade agreement, and global risk markets were effectively priced as such. However, things took a turn for the worse in May, sparking a risk-off trade and sending intermediate and long-term Treasury yields more than 35 basis points lower on the month. Why? 

Read: Breakdown In China Negotiations Sends U.S. Risk Markets Reeling

Happy Reading!

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

 
 

June 10, 2019


Comments

 
 
 

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