Bulk of Navy Federal’s NII Stems from Fees: Report
The $62 billion Navy Federal Credit Union makes more of its income from fees than any other credit union with more than $10 billion in assets, according to NCUA data from Sageworks Bank Information, a bank and credit union data platform.
The Vienna, Va.-based Navy Federal received $97.4 million in fee income as of June 30 and this gave it a ratio of fee income to average assets of 0.66%, which was more than double the same ratio from any other credit union with more than $10 billion in assets.
Sageworks explained it derived the fee income to average asset ratio from NCUA data after dividing annualized fee income by average assets.
The figure is a subset of the return on average asset ratio, which divides annualized income or loss by average assets in order to give a uniform basis for comparison of fee income among different credit unions, the firm said.
Sageworks acknowledged that it could be difficult to draw any conclusions from the ratio since so many different things can be included as fee income.
For example a credit union with a larger and more active enrolled credit or debit card base may receive higher card interchange, which is usually counted as fee income.
"It would be incorrect to derive any conclusion on fee income based on this particular ratio, as it includes a wide range of items that vary from one institution to another and that could be reported differently,: wrote Joel Polster, Navy Federal's Chief Financial Officer in an email. "Navy Federal offers the best rates and lowest fees in the industry. And we will continue to provide the best in products and services to our members," he added.
The $18.6 billion Pentagon Federal Credit Union in Alexandria, Va., made the second largest percentage of its income from fees at 0.32%, after receiving $14.3 million in fee income as of June 30.
The other three members of the $10 billion-plus credit union club came in with smaller numbers.
According to Sageworks, the $12.8 billion BECU in Tukwila, Wash., had a fee income to average asset ratio of 0.27%, based on fees of $8.4 million.
The $28.9 billion Raleigh, N.C.-based State Employees’ Credit Union’s ratio came in at 0.23%, based on receiving $16 million in fees.
The $10.4 million SchoolsFirst Federal Credit Union’s ratio stood at 0.15%, based on fees of $3.8 million for the Santa Ana, Calif.-based cooperative.