All New Credit Union Star-Ratings

All credit union star-ratings are now based on December 31, 2017 financial data at bauerfinancial.com.

Like banks, the number of federally-insured credit unions continues to decline. From year-end 2016 to year-end 2017, 213 credit unions were lost to mergers, acquisitions or failures; only one new one was chartered for a net change of 212.

Credit Union Indicators

Yet, membership continues to rise. So, what we see is change in the overall makeup of the industry. As larger credit unions get larger, the smallest credit unions are either merging or finding other ways to grow. The 284 credit unions with greater than $1 billion in assets now hold $875.6 billion in total assets accounting for 64% of the industry. Those with $500 million to less than $1 billion hold 13%; the 1,026 with asset from $100 million to less than $500 million hold 17%. The 3,307 “smaller” credit unions, those with less than $50 million in total assets, hold less than 5% of total industry assets. These credit unions are also reporting lower membership, a decline in loan volume and lower net worth than a year ago.

 Credit Unions by Asset Size

Not only is there a disparity between credit unions of varying sizes, there is also variation by state.

A state-by-state year-over-year comparison of credit union star ratings can be found on page 7. While the percent of recommended credit unions increased slightly over the year (from 80% to 80.5%) so did the percent of those rated 2-Stars or below, and thus relegated to Bauer’s Troubled and Problematic Credit Union Report (from 2.6% to 2.7%).

However, the nationwide percentages don’t communicate the whole story. Eight states currently have more than 4% of their credit unions rated 2-Stars or below. Puerto Rico no longer falls into that category after posting considerable improvement over the past year, but the majority of states that do have high percentages, are progressively get higher, from last year to last quarter to now.  On the flip side, there are 16 states (including PR) that do not currently have any credit unions  rated 2-Stars or below.

There are 11 states in which recommended credit unions (rated 5-Stars or 4-Stars) represent more than 90% of the industry. That’s down from 13 a year ago as Alaska and Colorado no longer fall into that category (Florida, Hawaii, Iowa, Maine, Minnesota, Nebraska, New Hampshire, New Mexico, Oregon, South Carolina and Washington do).

Nevada, on the other hand, not only has the lowest percent of recommended CUs at just 56.3%, that percent has gone down over the course of the year from 58.8% at December 31, 2016. Only 62.5% of the credit unions in Puerto Rico are recommended by Bauer, but that is up from just 45.5% a year earlier.

For the Free rating on any U.S. bank or credit union, please visit bauerfinancial.com, anytime, day or night. And… keep an eye out for our new website which will be coming soon.