Credit Union Industry HealthScore
Glatt Consulting, LLC’s Credit Union Industry HealthScore is a composite financial performance score reflecting the overall financial health of US-based credit unions. The score range is based on a 5-point scale, with 5 being the most healthy and 0 being the least healthy. The score components include Earnings, Capital, Growth, Member Relationship, Liquidity, Asset Quality, and Efficiency.
The HealthScore is calculated quarterly. The latest HealthScore, calculated December 2011, is 2.341. This is a slight decline from the prior quarter.
The latest release on the HealthScore is available here.
A listing of all HealthScore-related website content is available here.
More About the Glatt Consulting, LLC HealthScore
Score Formation and Use
Glatt Consulting, LLC is often called upon to aid credit unions in strategy development, including merger strategy. The HealthScore system was developed in 2008 as a means to quickly identify and rank the overall “health” of potential merger candidates on behalf of client credit unions. The use of the HealthScore system has since been expanded to support client engagements outside of merger strategy, including as a reference tool for broad client strategy planning and assessment.
The sophistication of the scoring process has been enhanced on a number of occasions since 2008. The most recent enhancement was the implementation of a new database system for rapid score calculation, storage and tracking.The benchmark performance criteria has not changed since the score was first developed (see below for calculation criteria).
General Score Calculation Process
Glatt Consulting, LLC’s HealthScore system is based on best-practice performance benchmarks for the following key categories:
- Earnings
- Capital
- Growth
- Member Relationship
- Liquidity
- Asset Quality
- Efficiency
Individual credit union performance is analyzed against each of the benchmark performance categories, resulting in category performance scores. An aggregate score, based on overall category performance, is then determined. Scores are logged for each and every federally insured credit union.
An aggregate score reflecting overall industry health, as well aggregate scores for each performance category, is also determined. This score is published as Glatt Consulting, LLC’s Credit Union Industry HealthScore.
The score is published as a means to spark industry discussion on strategic direction. Because strategy development is a dynamic challenge/response process, the score cannot be relied upon as a determinant/predictor of future industry performance. It can, however, show key areas of strategic concern to be mitigated, or strengths to be leveraged.
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