Survey: Industry Health Up Sharply But Membership, Loans Still Lag
The industry’s overall health improved markedly in the first quarter but its membership and loan stats still lag significantly, according to a survey compiled by Glatt Consulting LLC.
Releasing its quarterly “HealthScore” report Thursday, the Wilmington, N.C. firm said the industry’s first quarter performance jumped nearly 9% to 2.466 from the fourth quarter and a 2% increase from the year ago quarter.
Based on a 5-point scale with 5 as maximum performance, the Credit Union Industry HealthScore is a composite number based on earnings, capital growth, member relationship, liquidity, asset quality and efficiency.
“In contrast to gains in general growth score components, the score component on member growth continues to be a drag on overall credit union health,” noted Thomas Glatt Jr. of Glatt Consulting.
Despite a press favorable to CUs associated with the banking crises, “the credit union community has not been able to turn positive public opinion into widespread credit union membership growth,” Glatt said.
An additional concern, he said is the drop in lending scores comparing the first quarter and the fourth quarter. And “though the earnings component shows gains, lending trends and fee income legislation may reverse those improvements” hindering the ability to compete, the report said.
“The continued threat to earnings seems to have spurred a number of credit unions to execute workflow efficiency and expense management strategies, though much room remains for improvement,” Glatt said.
In detailing HealthScore history, the reported noted that the industry’s highest score over the past 10 years, 3.32, came in the first quarter of 2001 and the lowest was 2.263 in the fourth quarter of 2010.