State Leaders In Deposit Market Share

A surge in deposits helps prepare the books for interest rate increases.

 
 

A surge in deposits shows credit unions are increasingly becoming the financial institution of choice for members across the United States. In the first half of the year, credit unions posted record-breaking share growth rates and balances. Total shares increased 7.3% year-over-year and topped $1.1 trillion.

Approximately 53.7% of state credit unions were posting double-digit deposit market share as of June 30, 2016 — the most recent data set released by the FDIC for bank-to-credit union comparison. Additionally, 57.4% of states had at least $10 billion in total deposits on the books, which helps in sustaining the strong loan growth the industry has seen in recent years.

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State leaders in deposit market share tended to have more branches in concentrated areas with smaller populations relative to other cooperatives. Additionally, the difference between their total number of branches and those of bank branches in the state tended to be smaller.

DEPOSIT MARKET SHARE BY STATE

FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.16

© Callahan & Associates | www.creditunions.com
Rank State Market Share Total Deposits Credit Union Branches Bank Branches
1 Alaska 29.1% $4,940,999,948 104 127
2 Idaho 25.4% $7,901,930,225 210 506
3 Washington 23.6% $44,250,269,333 559 1,755
4 District of Columbia 23.3% $13,614,634,946 126 229
5 New Mexico 22.2% $8,801,049,096 156 487
6 Oregon 21.5% $19,541,472,947 305 1,027
6 Hawaii 21.5% $11,142,332,583 179 276
7 Vermont 19.4% $3,033,124,681 79 243
8 New Hampshire 18.7% $7,335,635,868 11 429
9 Michigan 18.0% $43,901,794,839 1,069 2,709

Source: Peer-to-Peer Analytics by Callahan & Associates.

These “sticky” balances tend not to leave the credit union when rates rise. Therefore, core deposits will be an integral component of asset-liability management strategies in 2017 as credit unions prepare for interest rate hikes in the coming year. The Federal Reserve raised its short-term rate in December and signaled it would do so again next year.

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Want to know where your credit union ranks in terms of deposit market share in your market? Contact Callahan to find out.

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In 2003, credit unions held a similar proportion of their deposit portfolio in core deposits as the Fed prepared to move up rates — which it did, 400 basis points between 2004 and 2006. The funding base credit unions had built helped them to post compounded annual growth of 10.1% between 2003 and 2006. Past performance provides a good indication that credit unions are once again well positioned to continue their lending momentum in the coming years.

 
 

Dec. 19, 2016


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