Small credit unions an endangered species?
A hot topic for 2018 has been the struggles of small credit unions compared to their larger peers. 2018 economic developments are broadly supportive of favorable credit union operating results and the first quarter was not disappointing. According to CUNA’s Credit Union Profile Report for 2018, continued strong membership growth, solid loan growth, and healthy earnings results were hallmarks of the credit union industry as we kicked off the year. Overall, credit unions reported a 4.3% increase in memberships with a total of 112.7 million memberships nationwide, an increase of 3.9% in savings balances, and a 1.6% growth in loan portfolio for Q1 2018. When broken down by asset size, however, the numbers prove the old saying “the rich are getting richer,” and the smaller CU’s need to look at leveraging technology efficiencies to survive.
Growth rates of membership are a good measure of the health of credit unions.
Credit unions with less than $50M in asset size witnessed a negative growth rate in membership totals ( -.9% for CU’s less than $20M in asset size, and -.4% for those between $20M-$50M). Credit unions slightly larger than these, with assets between $50M – $250M saw moderate growth rates in members of .4% – 1.3%, but small potatoes when compared to the impressive growth rates of large and extra-large credit unions nationwide, who boasted 4.3% – 6.9% increases in total memberships.
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