WILMINGTON, NC (March 4, 2015) -- Glatt Consulting’s Credit Union Industry HealthScore, updated to include fourth quarter 2014 data, is 2.512. The score represents a -.59% decline from the previous quarter’s score of 2.527 but a 4.04% improvement over 2013’s fourth quarter score of 2.415.
About the HealthScore
The Credit Union Industry HealthScore is a composite financial performance score reflecting the financial health of US-based credit unions. The HealthScore system calculates overall credit union health by scoring/grading credit union performance across eleven different key ratios including Net Worth, ROAA, Operating Expense, Efficiency, Charge-Off, Delinquency, Loans, Deposits, Loan-to-Share, Asset Growth, and Membership Growth. Grading is based on a five-point scale, with 0 reflecting poor health and 5 reflecting exceptional health.
The HealthScore is published quarterly and is used by Glatt Consulting, individual credit unions, and media professionals alike to track, report on, and respond to industry-wide trends affecting credit union health.
Score Strengths
In analyzing score data to uncover underlying trends we look to year-over-year percent changes in scores. The latest calculations show a pleasing, first-ever phenomenon – every score in the HealthScore system shows a positive change over the same period the year before. The heat-map style illustration below, which highlights negative changes in red and positive changes in orange, yellow, or green depending on the size of the change, showcases this fact.
| Date | CUs | HS | NW | RA | EX | EF | CO | DQ | LN | DE | LS | AG | MG |
| 03/31/2005 | -3.68 | 0.66 | 2.68 | 3.09 | -1.45 | 2.08 | 2.02 | 2.37 | 5.78 | 2.52 | 5.54 | -14.14 | -3.89 |
| 06/30/2005 | -3.67 | 0.66 | 3.33 | 7.47 | -2.44 | 5.62 | 1.92 | 1.2 | 6.18 | 1.15 | 8.72 | -23.55 | -1.84 |
| 09/30/2005 | -3.53 | 1.06 | 2.38 | 7.04 | -2.82 | 5.11 | 0.72 | 2.25 | 6.72 | 0.98 | 9.78 | -22.84 | -1.36 |
| 12/31/2005 | -3.58 | 0.27 | 2.62 | 4.52 | -3.17 | 3.41 | 0.07 | 1.07 | 6.72 | -0.14 | 10.39 | -28.43 | -3.09 |
| 03/31/2006 | -3.69 | 1.96 | 2.44 | 1.8 | -5.95 | -3.64 | 0.84 | 3.7 | 6.99 | 0.54 | 11.95 | 0.7 | -1.84 |
| 06/30/2006 | -2.96 | 1.92 | 2.28 | 3.58 | -6.17 | -2.01 | 1.44 | 4.38 | 5.91 | -0.19 | 10.01 | -1.52 | -0.6 |
| 09/30/2006 | -2.98 | 1.14 | 2.29 | 4.12 | -6.68 | -2.48 | 2.95 | 4.01 | 4.69 | -1.03 | 8.63 | -10.76 | -2.81 |
| 12/31/2006 | -3.01 | 1.57 | 1.5 | 4.82 | -7.1 | -4.66 | 3.11 | 4.39 | 3.93 | -0.36 | 7.88 | -2.03 | -2.26 |
| 03/31/2007 | -2.81 | 1.68 | 0.97 | -0.12 | -6.54 | -6.22 | 3.36 | 0.83 | 3.16 | 0.38 | 6.37 | 15.53 | -5.08 |
| 06/30/2007 | -3.51 | 1.98 | 0.26 | -0.69 | -5.57 | -5.28 | 1.79 | -0.66 | 2.55 | 2.04 | 4.06 | 30.1 | -6.76 |
| 09/30/2007 | -3.53 | 1.01 | 0.13 | -2.67 | -5.29 | -5.8 | 0.85 | -1.8 | 2.08 | 2.39 | 1.99 | 34.03 | -7.67 |
| 12/31/2007 | -3.14 | 0.14 | -0.13 | -4.77 | -4.83 | -5.26 | 0.21 | -4.22 | 2.14 | 2.55 | 0.88 | 30.21 | -6.32 |
| 03/31/2008 | -3.1 | -1.89 | -0.88 | -13.71 | -1.68 | -10.24 | -2.89 | -5 | 1.55 | 4.07 | -1.54 | 7.76 | -1.38 |
| 06/30/2008 | -3.27 | -2.3 | -1.67 | -21.79 | -0.79 | -17.5 | -4.25 | -5.07 | 1.13 | 6.11 | -5.06 | 21.66 | 1.41 |
| 09/30/2008 | -3.19 | -2.17 | -1.59 | -23.74 | -0.62 | -17.44 | -4.64 | -5.63 | 0.89 | 6.1 | -4.93 | 33.06 | 4.14 |
| 12/31/2008 | -3.63 | -4.45 | -3.6 | -36.68 | -2.95 | -26.97 | -7.06 | -7.6 | 0.87 | 7.37 | -6.14 | 42.71 | 3.56 |
| 03/31/2009 | -3.72 | -14.54 | -9.78 | -76.34 | -53.79 | -12.14 | -9.35 | -8.74 | 1.63 | 7.55 | -8.44 | 0.42 | 5.09 |
| 06/30/2009 | -3.54 | -4.2 | -6.18 | -29.85 | -24.22 | 69.99 | -10 | -10.72 | 2.16 | 6.81 | -7.9 | -0.05 | 3.49 |
| 09/30/2009 | -3.36 | -3.42 | -7.34 | -30.15 | -15.54 | 51.86 | -10.06 | -10.74 | 2.72 | 8.87 | -8.43 | 8.05 | 3.28 |
| 12/31/2009 | -3.24 | -1.46 | -7.66 | -27.89 | -7.79 | 65.7 | -9.49 | -7.4 | 2.43 | 9.34 | -10.59 | 13.03 | 2 |
| 03/31/2010 | -3.26 | 9.07 | -0.66 | 185.89 | 139.84 | 10.19 | -1.41 | -3.18 | 1.65 | 6.88 | -11.42 | -7.64 | -5.77 |
| 06/30/2010 | -3.15 | -4.46 | -4.81 | -19.52 | 36.07 | -35.93 | 0.23 | 0.26 | 1.32 | 6.27 | -10.59 | -15.96 | -5.43 |
| 09/30/2010 | -3.05 | -5.54 | -3.57 | -19.36 | 21.66 | -35.08 | 0.86 | 2.32 | 0.13 | 5.44 | -11.72 | -21.68 | -6.12 |
| 12/31/2010 | -2.84 | -4.21 | -0.42 | 5.8 | 17.03 | -41.28 | 3.14 | 4.36 | -0.35 | 4.53 | -10.51 | -25.99 | -5.79 |
| 03/31/2011 | -2.74 | 1.45 | -1.45 | 17.63 | 0.86 | -6.99 | 4.85 | 5.2 | -0.23 | 4.82 | -12.03 | 8.4 | -7.95 |
| 06/30/2011 | -2.82 | 2.9 | 0.47 | 48.42 | 6.68 | -15.19 | 5.44 | 5.7 | -0.28 | 4.05 | -10.37 | 4.59 | -9.16 |
| 09/30/2011 | -3.06 | 0.95 | -0.47 | 26.95 | 2 | -26.31 | 5.61 | 5.97 | -0.55 | 4.49 | -11.07 | 6.16 | -7.17 |
| 12/31/2011 | -3.35 | 2.47 | -0.02 | 25.5 | 2.69 | -5.04 | 5.81 | 5.5 | 0.09 | 3.9 | -9.36 | 4.56 | -0.66 |
| 03/31/2012 | -3.71 | 2.74 | -0.72 | 5.16 | 2.86 | -2.65 | 2.75 | 5.61 | 0.7 | 4.17 | -10.78 | 7.17 | 23.95 |
| 06/30/2012 | -3.8 | 3.57 | -0.67 | 3.47 | 3.07 | -4.87 | 3.77 | 7.08 | 1.07 | 4.09 | -9.19 | 14.75 | 22.54 |
| 09/30/2012 | -4.01 | 5.62 | 0.96 | 19.12 | 8.14 | 14.24 | 4.52 | 6.99 | 1.89 | 3.56 | -6.15 | 9.86 | 18.04 |
| 12/31/2012 | -3.87 | 4.18 | 1.12 | 12.74 | 6.17 | 5.67 | 4.67 | 6.23 | 2.4 | 3.91 | -5.39 | 7.02 | 8.99 |
| 03/31/2013 | -3.77 | -0.62 | 1.46 | -10.58 | 2.71 | -17.26 | 4.44 | 5.34 | 2.4 | 3.16 | -3.48 | -1.98 | -13.41 |
| 06/30/2013 | -4.04 | -1.47 | 1.8 | -8.54 | 2.53 | -15.33 | 4.39 | 2.93 | 2.83 | 3.04 | -1.55 | -12.16 | -13.27 |
| 09/30/2013 | -3.95 | -1.69 | 2.02 | -8.31 | 1.77 | -14.86 | 4.15 | 3.73 | 3.34 | 2.74 | 1.01 | -21.26 | -9.31 |
| 12/31/2013 | -3.92 | -1.36 | 2.26 | -7.75 | 1.89 | -13.65 | 4.6 | 2.82 | 3.52 | 2.26 | 3.53 | -25.29 | -6.53 |
| 03/31/2014 | -3.94 | 1.8 | 2.43 | -3.31 | 0.87 | -3.52 | 2.6 | 5.27 | 3.87 | 2.33 | 5.76 | -0.23 | -3.71 |
| 06/30/2014 | -3.78 | 1.65 | 2.34 | -0.45 | 0.72 | -0.79 | 2.59 | 3.25 | 4.01 | 2 | 6.91 | -4.04 | -2.21 |
| 09/30/2014 | -4.06 | 2.93 | 2.46 | 7.02 | 1.99 | 7.31 | 2.62 | 3.7 | 4.32 | 2.12 | 6.98 | -4.21 | 0.02 |
| 12/31/2014 | -4.26 | 4.04 | 1.85 | 6.95 | 1.98 | 6.95 | 3.34 | 6.21 | 4.53 | 2.52 | 5.71 | 6.04 | 2.3 |
Key: Total Credit Unions (CUs), HealthScore (HS), Net Worth (NW), Return on Assets (RA), Operating Expense (OE), Efficiency (EF), Charge Off (CO), Delinquency (DQ), Loans (LN), Deposits (DE), Loan to Share (LS), Asset Growth (AG), Membership Growth (MG)
Note: The column titled “Total CUs” measures the percent change year-over-year in the total number of credit unions. Unfortunately, this column does not share the positive attributes of the other columns in the table.
What is most impressive about the data is the relative size of the positive changes – especially for ROAA and Efficiency. For those two elements in particular, to see such improvement two quarters in a row is a welcome change after six straight quarters of declining scores.
With regard to the noteworthy positive change in membership growth scores, this too is a welcome trend – though as we note below we fear the positive change is the result of the above average success of the minority rather than an indication of broad industry improvement.
All-in-all, however, the industry is on the right track and gaining health. This should reinforce the decision that millions of Americans have made to invest their trust, and money, in credit unions.
Industry Challenges Remain
Despite the noted score improvements, challenges do remain for large pockets of the credit union community. For example, in the 4th quarter fully 34% of credit unions experienced negative loan growth, and 54% experience negative membership growth. This startling statistic indicates a number of credit unions are not only failing to attract new consumer relationships, but are failing to even attract lending relationships from within their existing memberships. This must be corrected.
The lending and membership growth trends are likely critical contributing factors to the high year-over-year decline in total credit unions noted in the heat map table above. Given that so many credit unions struggle to drive loan growth and/or membership growth, we can only assume that the rate of consolidation will remain consistently high for the foreseeable future.
In addition, though positive year-over-year changes abound, the low scores credit unions tend to earn in certain specific areas indicate a need for more aggressive performance improvement. The table below illustrates the actual scores the industry earned for each component of the HealthScore system – with return on assets, efficiency (a measurement of the relationship between expense and income), and membership growth representing the lowest scores.
| Date | HS | NW | RA | EX | EF | CO | DQ | LN | DE | LS | AG | MG |
| 03/31/2005 | 2.559 | 3.528 | 2.787 | 2.819 | 1.602 | 2.972 | 2.787 | 2.296 | 2.701 | 2.895 | 2.372 | 1.393 |
| 06/30/2005 | 2.562 | 3.575 | 2.886 | 2.813 | 1.638 | 3.077 | 2.778 | 2.360 | 2.692 | 3.045 | 2.031 | 1.285 |
| 09/30/2005 | 2.569 | 3.605 | 2.995 | 2.790 | 1.709 | 3.103 | 2.750 | 2.428 | 2.673 | 3.224 | 1.744 | 1.242 |
| 12/31/2005 | 2.500 | 3.631 | 2.808 | 2.724 | 1.599 | 3.087 | 2.698 | 2.456 | 2.645 | 3.310 | 1.408 | 1.131 |
| 03/31/2006 | 2.609 | 3.615 | 2.837 | 2.651 | 1.544 | 2.997 | 2.890 | 2.457 | 2.716 | 3.241 | 2.389 | 1.368 |
| 06/30/2006 | 2.611 | 3.656 | 2.989 | 2.640 | 1.605 | 3.122 | 2.900 | 2.500 | 2.686 | 3.350 | 2.000 | 1.277 |
| 09/30/2006 | 2.598 | 3.687 | 3.118 | 2.604 | 1.667 | 3.194 | 2.860 | 2.542 | 2.645 | 3.502 | 1.556 | 1.207 |
| 12/31/2006 | 2.539 | 3.686 | 2.943 | 2.530 | 1.524 | 3.183 | 2.816 | 2.553 | 2.636 | 3.571 | 1.379 | 1.105 |
| 03/31/2007 | 2.653 | 3.650 | 2.833 | 2.478 | 1.448 | 3.098 | 2.914 | 2.534 | 2.726 | 3.447 | 2.760 | 1.298 |
| 06/30/2007 | 2.663 | 3.666 | 2.968 | 2.493 | 1.520 | 3.178 | 2.880 | 2.564 | 2.741 | 3.486 | 2.602 | 1.191 |
| 09/30/2007 | 2.624 | 3.692 | 3.035 | 2.466 | 1.570 | 3.222 | 2.809 | 2.595 | 2.709 | 3.572 | 2.086 | 1.115 |
| 12/31/2007 | 2.542 | 3.681 | 2.802 | 2.408 | 1.444 | 3.190 | 2.697 | 2.608 | 2.703 | 3.602 | 1.796 | 1.036 |
| 03/31/2008 | 2.603 | 3.618 | 2.445 | 2.436 | 1.300 | 3.008 | 2.768 | 2.574 | 2.837 | 3.394 | 2.974 | 1.280 |
| 06/30/2008 | 2.601 | 3.605 | 2.321 | 2.473 | 1.254 | 3.043 | 2.734 | 2.593 | 2.909 | 3.310 | 3.166 | 1.208 |
| 09/30/2008 | 2.567 | 3.633 | 2.315 | 2.451 | 1.296 | 3.072 | 2.650 | 2.618 | 2.874 | 3.396 | 2.776 | 1.161 |
| 12/31/2008 | 2.429 | 3.549 | 1.774 | 2.337 | 1.055 | 2.965 | 2.492 | 2.631 | 2.902 | 3.381 | 2.563 | 1.072 |
| 03/31/2009 | 2.224 | 3.264 | 0.578 | 1.126 | 1.142 | 2.727 | 2.526 | 2.616 | 3.051 | 3.107 | 2.986 | 1.345 |
| 06/30/2009 | 2.492 | 3.382 | 1.628 | 1.874 | 2.132 | 2.738 | 2.441 | 2.649 | 3.107 | 3.048 | 3.164 | 1.250 |
| 09/30/2009 | 2.480 | 3.367 | 1.617 | 2.070 | 1.969 | 2.763 | 2.366 | 2.690 | 3.129 | 3.110 | 2.999 | 1.199 |
| 12/31/2009 | 2.394 | 3.277 | 1.280 | 2.155 | 1.747 | 2.683 | 2.308 | 2.694 | 3.173 | 3.023 | 2.896 | 1.094 |
| 03/31/2010 | 2.426 | 3.243 | 1.654 | 2.700 | 1.258 | 2.689 | 2.446 | 2.659 | 3.261 | 2.752 | 2.758 | 1.268 |
| 06/30/2010 | 2.381 | 3.219 | 1.311 | 2.550 | 1.366 | 2.745 | 2.448 | 2.683 | 3.301 | 2.725 | 2.659 | 1.182 |
| 09/30/2010 | 2.342 | 3.247 | 1.304 | 2.518 | 1.278 | 2.787 | 2.421 | 2.693 | 3.299 | 2.746 | 2.349 | 1.125 |
| 12/31/2010 | 2.293 | 3.263 | 1.354 | 2.522 | 1.026 | 2.768 | 2.409 | 2.685 | 3.317 | 2.705 | 2.144 | 1.031 |
| 03/31/2011 | 2.461 | 3.196 | 1.945 | 2.723 | 1.170 | 2.819 | 2.573 | 2.653 | 3.419 | 2.421 | 2.990 | 1.167 |
| 06/30/2011 | 2.450 | 3.234 | 1.945 | 2.720 | 1.158 | 2.894 | 2.587 | 2.676 | 3.435 | 2.443 | 2.781 | 1.074 |
| 09/30/2011 | 2.365 | 3.232 | 1.655 | 2.569 | 0.942 | 2.943 | 2.565 | 2.678 | 3.447 | 2.442 | 2.494 | 1.045 |
| 12/31/2011 | 2.350 | 3.263 | 1.699 | 2.590 | 0.974 | 2.928 | 2.541 | 2.687 | 3.446 | 2.452 | 2.241 | 1.024 |
| 03/31/2012 | 2.529 | 3.173 | 2.046 | 2.801 | 1.139 | 2.896 | 2.718 | 2.671 | 3.561 | 2.160 | 3.204 | 1.446 |
| 06/30/2012 | 2.537 | 3.213 | 2.013 | 2.804 | 1.102 | 3.003 | 2.770 | 2.704 | 3.576 | 2.218 | 3.192 | 1.316 |
| 09/30/2012 | 2.497 | 3.263 | 1.972 | 2.778 | 1.076 | 3.076 | 2.744 | 2.729 | 3.570 | 2.291 | 2.740 | 1.233 |
| 12/31/2012 | 2.448 | 3.299 | 1.916 | 2.750 | 1.030 | 3.065 | 2.699 | 2.752 | 3.581 | 2.320 | 2.399 | 1.116 |
| 03/31/2013 | 2.513 | 3.219 | 1.829 | 2.877 | 0.943 | 3.025 | 2.863 | 2.735 | 3.674 | 2.085 | 3.140 | 1.252 |
| 06/30/2013 | 2.500 | 3.271 | 1.841 | 2.875 | 0.933 | 3.135 | 2.852 | 2.781 | 3.685 | 2.184 | 2.803 | 1.141 |
| 09/30/2013 | 2.455 | 3.328 | 1.808 | 2.827 | 0.916 | 3.204 | 2.847 | 2.820 | 3.668 | 2.315 | 2.157 | 1.118 |
| 12/31/2013 | 2.415 | 3.374 | 1.767 | 2.802 | 0.889 | 3.206 | 2.775 | 2.849 | 3.662 | 2.402 | 1.792 | 1.043 |
| 03/31/2014 | 2.558 | 3.297 | 1.769 | 2.902 | 0.910 | 3.104 | 3.014 | 2.841 | 3.759 | 2.205 | 3.133 | 1.206 |
| 06/30/2014 | 2.541 | 3.347 | 1.832 | 2.896 | 0.926 | 3.216 | 2.944 | 2.892 | 3.758 | 2.335 | 2.690 | 1.116 |
| 09/30/2014 | 2.527 | 3.410 | 1.935 | 2.883 | 0.983 | 3.288 | 2.952 | 2.942 | 3.745 | 2.476 | 2.067 | 1.119 |
| 12/31/2014 | 2.512 | 3.436 | 1.890 | 2.857 | 0.951 | 3.313 | 2.948 | 2.978 | 3.755 | 2.539 | 1.900 | 1.067 |
Fortunately the industry is maintaining its well-capitalized status, meaning that credit unions have the capacity to invest in the organizational improvements necessary to lift less-healthy scores while maintaining competitive abilities and service to existing members.
About Glatt Consulting
Glatt Consulting provides distinctive strategy consulting that leads to achievement, growth, and financial health for our credit union clients. The firm’s specialties include assistance in defining corporate strategy, designing organizational structure and workflow, and working with credit union leadership teams to improve and better leverage organizational culture.
Long-time credit union consultant Tom Glatt, Jr. founded Glatt Consulting in 2006 following eleven years of strategy consulting at bank/credit union consulting firm Counter Intelligence Associates.
Glatt Consulting also created and publishes the influential Credit Union Industry HealthScore, a composite performance score designed to gauge the financial health of US-based credit unions. The HealthScore is released quarterly and is used by Glatt Consulting, individual credit unions, and media professionals alike to track, report on, and respond to industry-wide trends affecting credit union health.