Credit Unions Continue Steady Improvement

Glatt Consulting’s Q3 2019 HealthScore data has been released and, once again, the industry continued its steady climb of year-over-year improvement by posting a score of 5.964. While this quarter’s score is a mere 0.51% increase versus Q3 2018, the latest industry score extends the streak of 23 straight quarters of year-over-year performance improvement when comparing like periods. However, this quarter’s growth of 0.51% is the smallest year-over-year increase during that time period. Despite the continued relative strength of the overall HealthScore, the accelerating weakness in both Loan Growth and Membership Growth is concerning and will present challenges in other categories going forward if this trend continues.

HealtScore year-over-year trend chart.
Year-Over-Year %Change in the Credit Union HealthScore

Credit unions performed better in 13 of the 17 HealthScore categories. Some notable positive score drivers include Asset Growth, and Cash & Short-Term Investments, which grew at their fastest rates in over two years. Return on Assets and Efficiency were both able to post year-over-year increases but their rate of growth slowed significantly versus Q2. Asset growth is not keeping pace with the growth in Operating Expenses, which is causing the slowdown in Efficiency.

Loan growth year-over-year trend chart.
Loan Growth Scores Continue to Drop

Across the industry, Loan Growth and Membership Growth once again experienced year-over-year weakness with scores down 22.57% and 7.52% respectively versus Q3 2018. The continued weakness in these two components is likely to result in the eventual decline of other components such as Income and Efficiency. The continued increases in Loans Per Member and Borrowings Per Member is helping insulate credit unions from the effects of declines in Loan and Membership Growth in the short-term. However, current trends show that the rate of decline in these two ‘Membership’ components is outpacing the growth in the ‘Per Member’ components of Loans and Borrowings. This dynamic will present operational challenges for the industry going forward if it continues. We will continue to monitor this situation closely.

Visit https://www.glattconsulting.com/healthscore/healthscore-trends for year-over-year score trends for all of our HealthScore components.

Get Your Report

If you are a credit union leader or employee, sign up to receive your own complementary HealthScore report.

We’ve added four new components to our complementary quarterly HealthScore report, offering additional valuable data for credit union subscribers. New additions include:

  • Industry score history
  • Industry year-over-year data
  • Asset peer section
  • Current quarter comparisons in the industry, peer, state, and local sections, which compares the CU’s current scores to the averages for the cohort in question.

We think you’ll enjoy the report!


Image by Mudassar Iqbal from Pixabay

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