Credit Unions Grow by all Means

Credit Unions Grow by all Means

While the number of federally insured credit unions continues to decline, by every other measure, they are growing strong. Between year-end 2006 and year-end 2016, the number of federally insured credit unions dropped 31%; total assets, on the other hand, increased by 82%. As a result, the median credit union has $29.05 million in assets, up from $12.5 million in 2006. The “average” credit union today has over $223 million in assets, a 163% increase over 2006. The whys and hows are as varied as the credit unions themselves.

The list on page 7 includes all federally insured credit  unions that increased their asset size by 26% or more during calendar 2016 with the exception of any that are too new or too small (less than $1.5 million in assets) to have a star rating. Let’s take a look at a few of them.

The first one, ****Fellowship Credit Union, Lamar, CO, acquired a like-minded CU, ***Arkansas Valley FCU, Las Animas, CO on October 1, 2016. The transaction nearly doubled its asset size (from $12.6 million to $23.3 million) and more than doubled its membership (from 2,487 to 5,469). This is Fellowship’s third credit union acquisition since its inception in 1959.

The second CU listed, ****Stewart’s FCU, Saratoga Springs, NY, took a very different approach to building its assets. Comparing its 12/31/15 Call Report to that of 12/31/16, we see its number of potential members is unchanged at 6,000. And, its number of current members actually dropped during the year (from 3,005 to 2,754). Yet, it has been very successful in increasing the amount of shares on deposit by those members.

While Stewart’s FCU is trying to attract more lending with attractive rates, it has been only marginally successful. Instead, the majority of those new shares are now on deposit in other financial institutions. The total amount it reports on deposit in other financial institutions has increased from just over $1 million to just under $9 million.

In regards to the third CU listed on page 7, it was the acquired institution, ***Jeff-Co Schools FCU, Mount Vernon, IL, that began searching for a partner. With less than $9 million in assets and limited resources, the board & CEO decided this was the best way to offer members services and amenities they were requesting. ***Kaskaskia Valley Credit Union, Centralia, IL fit the bill.

Skip down the list about one-third of the way to ****Manatee Community CU, Bradenton, FL. This credit union’s growth stems mainly from bank closings in Gulf Coast region over the past several years.  As a community credit union, its membership is open to anyone who lives, works, attends school or worships in Manatee County, including displaced and/or dissatisfied bank customers. During calendar 2016, its membership grew 16% while its assets grew 50%.

Skip down again about two-thirds of the way. *****City Center Credit Union, Provo, UT was originally chartered in 1928 to serve the needs of postal employees in the Provo area. It has expanded that field and is now open to all residents of Provo County. In the past year, its membership has grown 17.8% and its assets have grown 33.7%.

Still others are growing by buying banks (or portions of banks). The most recent, ***Self-Help CU, Durham, NC, announced in March that it plans to buy much of the failed Seaway B&T, Chicago, IL from  *****State Bank of Texas, Dallas. State Bank assumed the deposits and $309 million in assets when Seaway was closed in January. The plan now is for nine branches and $200 million in deposits to be taken over by  Self-Help CU.

In January, *****Advia CU, Parchment, MI announced it will be acquiring its second Wisconsin bank in six months. Last August it purchased ***Mid America Bank, Janesville adding four branches and $81 million in assets (13.8%) which was not enough to get it on page 7. Now it is in the process of acquiring *****Peoples Bank, Elkhorn, WI with assets of $237 million or, another 17.5%.

Other recently announced bank acquisitions by CUs include (but are not limited to):

*****IBM Southeast Employees CU, Boca Raton, FL has filed all of the necessary paperwork to acquire $110 million asset *****Mackinac SB, FSB, Boynton Beach, FL, which will increase its assets by 12%;

*****Family Security CU, Decatur, AL will increase its assets by 4% when it acquires the $20 million ***½ Bank of Pine Hill, AL; and

*****Royal CU, Eau Claire, WI barely made a dent in its asset size when it acquired $35 million asset Capital Bank in St. Paul, MN last year. And the list goes on.