Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON – Lower yields on loan and investment portfolios, higher operating expenses and sluggish member growth all contributed to 2004′s 0.92% return on assets, which is down from 1.01% in 2003 according to year-end analysis from Callahan & Associates. While ROA has been on a downward spiral for the past decade, the question becomes should CUs place stronger emphasis on this category as a benchmark? “There are differing opinions,” according to Callahan. “One school of thought – some might say the traditional one – has to do with the underlying credit union mission: serving the member.” Dissenters say in order to “remain viable financial service providers in a highly competitive environment, (there is a) need to invest in infrastructure and develop platforms,” Callahan reported. Reducing dividends paid to members, charging market rates on loans, and maintaining branch presence only in affluent areas should lead to higher net income for credit unions, in the process boosting ROA for the whole industry, Callahan said. “But most of us would see these actions as conflicting with the fundamental principles by which credit unions are governed,” Callahan offered. At the end of the day, determining the right level of ROA “is as much an art as a science.”

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.