Credit Union Industry’s Growing Footprint

Credit Union Industry’s Growing Footprint

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As the nation’s banking industry continues to contract, losing more than 3,000 branch offices in the 12 month period ending March 31, 2022 (JRN 39:27), credit unions are growing their presence, albeit slowly. During the same 12 month period, federally-insured credit unions reported a net increase of 124 branches.

Those that increased their footprint by at least three branches during that timeframe are listed on pages 2 and 7. Credit unions that did so with the help of a bank acquisition are on page 2, while those that grew either organically or by way of credit union acquisitions can be found on page 7.

In both cases, the column headed “Qty New” denotes how many more branches the credit union reported this March (2022) over March of 2021. The column next to that: “More New” indicates whether the credit union plans (or expects) to open more new branches in the next 12 months.

In May, (JRN 39:20) we reported that, while some credit unions relied on bank acquisitions to fuel their growth, that was not the case for the majority. These charts further illustrate that point. For those that do seek bank acquisitions, the path is not always easy. In fact, it can get downright contentious.

JRN listee 5-Star Financial Federal Bank, Memphis, TN has found itself in the crosshairs of one particular battle. Last August, 5-Star Orion Federal Credit Union, Memphis, TN, a federally-chartered credit union, announced its intention to purchase its state-chartered bank neighbor. The state had other ideas and the transaction has been tied up in Tenn. courts since November.

We won’t attempt to predict the outcome. (Last December, Nebraska successfully scuttled the sale of a state-chartered bank purchase by an out-of-state credit union.)  But, each state is different and until there is some resolution, Financial Federal will remain on our rate pages… and with very attractive rates.

Orion FCU has just shy of $1.1 billion in assets, 12 branch offices and 180 employees. Financial Federal has roughly $800 million in assets, one location and 59 employees. Both are 5-Stars rated and both are community-centric.

The acquisition of banks by credit unions is a relatively new phenomena and, as evidenced on page 7, is much less common than other avenues of growth. Much more common is an expanded field of membership. That was the case with 5-Star OnPoint Community CU, Portland, OR, with 16 reported new locations.

In 1932, Portland Teachers Credit Union was established by 16 schoolteachers looking for a safe place to save and provide low-cost loans to other teachers. OnPoint’s first true expansion came in 1981 with the acquisition of University of Portland Employees CU.

In 2005, OnPoint was granted a community charter allowing it to serve all of Oregon and Southwest Washington. It was at this point that the name was changed to OnPoint Community Credit Union.

With these 16 new locations and asset growth of 14% in the last 12 months, OnPoint CCU is second in size in the Northwest to 5-Star Boeing Employees CU, WA. It is also among the largest 5% in the country. And, it was (almost) all done organically. More impressive still, is that OnPoint Community CU has earned Bauer’s highest 5-Star rating for 50 consecutive quarters (12½ years).

OnPoint does not indicate plans to open more branches in the next 12 months, but it’s amazing how many credit unions do have such plans. March 31st filings indicate over 15% of the industry is looking to expand.

Entity # Credit Union Name City ST Star Rating Total Assets      ($ mils) Capital Ratio Bauer's Adj. CR Qty New More New Acquired a Bank in 2021/22
60823 Alabama C.U. Tuscaloosa AL 5-Stars $1,444.395 10.31% 10.11% 3 Yes Security FSB (3/1/22)
68595 Alabama One C.U. Tuscaloosa AL 4-Stars $961.985 9.02% 8.62% 4 Yes First Bank of Linden (5/28/21)
68417 Fairwinds C.U. Orlando FL 5-Stars $4,158.984 9.52% 9.05% 5 Yes Citizens Bank of Florida (4/14/22)
60269 GreenState C.U. North Liberty IA 5-Stars $9,479.596 10.29% 9.85% 5 Yes Oxford Bank & Trust (1/1/22)
66370 Scott C.U. Edwardsville IL 4-Stars $1,672.876 8.69% 8.38% 4 Yes Tempo Bank (6/18/22)
62514 Lake Michigan C.U. Grand Rapids MI 5-Stars $12,113.182 10.28% 10.21% 10 Yes Pilot Bank (2/22/21)
6288 United Federal C.U. St Joseph MI 5-Stars $3,885.455 9.74% 9.22% 4 No Edgewater Bank (5/1/21)

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