Although it’s best not to conflate causation with correlation, it’s hard to ignore the flow of crude out with the flow of shares in when it comes to credit unions and the country’s oil patch.
According to Callahan & Associates, the industry posted year-over-year share growth of 6.9%. But despite the fact every state posted positive year-over-year share growth, not all growth is equal.
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The map below shows a ranking of share growth 1-51, with the top share growth state, Idaho at 14.0%, the darkest color green and the bottom share growth state, North Dakota at 0.7%, the darkest color red. Under the share growth map is a map from the Energy Information Administration showing the shale plays in the continental United States.
The correlation is striking. The price of oil has plummeted globally, and regions with previously booming shale markets have felt the consequences. Just four years ago, North Dakota ranked as the top credit union share growth state with a 15.2% year-over-year surge in the first quarter of 2012.
Now, it’s last in share growth and in the bottom 10 in both loan and member growth.
North Dakota’s slowdown could simply be a result of its economy playing catch-up to the years of skyrocketing growth. However, jobs have been shed by the thousands and boomtowns like Williston have seen businesses close and workers leave town.
Here’s another reality: the state’s delinquency ratio among credit unions has crept up to 1.00% and now sits at 29 basis points above the U.S. average of 0.71%.
According to the U.S. Energy Information Administration, oil prices rose in April to $40.78 a barrel. Perhaps, this is indicative of a rebound and the North Dakota credit union industry will start to feel the positive effects of the rising prices soon.