Credit unions are likely to focus more on deepening relationships with existing members this year.
According to CUNA Mutual Group's January Credit Union Trends Report, that plan comes as the industry seeks recovery from margin and bottom line pressures over the past two years. The data, tracked through November, showed membership was up 951,000 year to date for a total of 93 million.
Last year's forecast estimates of a million additional members is below results over the previous four years and what was anticipated, wrote Dave Colby, chief economist at CUNA Mutual. Still, credit unions will likely add another million members in 2011, as their economic, operational and regulatory environments will be similar to those experienced in 2010, he added.
"Going forward, large credit unions will dominate membership gains and a significant percentage of small credit unions will see a reduction in the number of members," Colby said.
Meanwhile, 2010 will go down as the year of managed results, Colby offered, saying credit unions may expect modest financial improvements by the end of 2011, but certainly not a strong rebound.
"Managing asset growth lower through deposit pricing was necessary, but not a sustainable business model," Colby said. "Replenishing capital despite the strong headwinds of assessments and the economy will be the most notable accomplishment. The loan portfolio decline was the result of prudent interest rate and duration risk management, but asset yields suffered."
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