The fiscal health and financial performance of U.S. creditunions declined from first quarter 2013 to second quarter 2013,according to the latest Glatt Consulting Credit Union Industry HealthScore.

According to the recent analysis released Tuesday, credit unionhealth declined from a first-quarter figure of 2.446 tosecond-quarter score of 2.402. Quarter-to-quarter score comparisonsbetween first and second quarter show a 1.76% decline in the overallindustry score, driven by lower scores for efficiency, operatingexpense, delinquency, asset growth and membership growth.

On a positive note, scores for net worth, return on averageassets, charge offs, deposit relationships and loan relationshipsshowed improvement, according to the report from consultant TomGlatt Jr. in Wilmington, N.C.

Glatt Consulting's HealthScore process is based on best-practiceperformance thresholds for 11 different key credit union metrics.Individual credit union performance is analyzed against performancethresholds for each metric, a process that results inmetric-specific health scores. These scores are then averaged toarrive at an overall health score for the credit union. Using theseinstitution-specific scores, the process is repeated to derivescores for the industry itself.

Many of the changes quarter-to-quarter, positive and negative,were driven by common seasonal influences impacting asset andmembership growth, the consulting firm said.

The greatest score decline was for efficiency, which measures the relationship between operatingexpenses and income. Efficiency often fluctuates between positiveand negative changes, but given legislative/regulatory decisionsimpacting non-interest income, tight margins due to the lowinterest rates, and seemingly perpetual increases in operatingexpenses, the “normal” trend has been continuous negativescores.

Though well removed from the lowest historical score of 2.148calculated for the first quarter of 2009 during the latestrecession, recent scores rank below the industry average score of2.420. The highest current individual health score is 4.727,while the lowest is 0.18. These scores are held by credit unions inOhio and Illinois, respectively, the consulting firm added.