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Credit Union Consolidation Trends

Explore the future of credit union mergers, operating ratios, and reasons behind consolidation. Gain insights on challenges and strategies for sustainability in the changing financial landscape.

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Credit Union Consolidation Trends

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  1. Credit Union Consolidation Trends Mike Schenk Chief Economist Credit Union National Association mschenk@cuna.coop

  2. The Long View….

  3. Credit Union Consolidation: 10-Year ForecastProjected for 2018-2027

  4. Operating Ratios at Recent Merged/Consolidated CUs • Adjusting for Asset Size and Compared to All CUs Recently-Merged CUs Reflect: • Similar LTS ratios • Similar variety of service offerings • Similar number of branches • Similar asset quality (NCOs) • Lower membership growth • Lower loan growth • Lower earnings

  5. Reasons for Mergers/Consolidation Vary • Large & increasing regulatory burden • Lack of adequate succession planning • Loss of sponsor • Increasing competitive pressures • Large institutions (banks & CUs) • FOM overlaps • Fintech • Lack of strategic planning • Inability to offer services members desire esp. expensive technology-based services • Lack of convenience/24-7 access • Difficulty of attracting/retaining qualified CEO/staff • Challenges in providing benefit packages (health insurance, retirement, etc.) • Pay tends to be low in context of expertise requirements & time demands • Difficulty of attracting/retaining qualified board • Financial challenges (corporate stabilization, etc.) • Aging membership • Challenges in seeking/using available resources

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