Credit Union Loan Growth Declines

In the financial  world too “Big to Fail ” is often mentioned. Especially now that the BIG are getting BIGGER and garner the lion’s share of the loan market as well.

The big credit unions also make the most loans, which isn’t surprising. However the percentages are surprising.

• <$5 Million size credit unions don’t even have a 1% market share, with 1867.
• $5-$20 Million size credit unions have a 2% market share, with 2072.
• $20-$100 Million size credit unions have a 10% market share, with 2149.
• $100+ Million size credit unions have a whopping 88% market share, with 1398. This category represents on 18% of the number of credit unions in this country.

The bigger credit unions are the ones making the majority of the loans. Hopefully there will not be any more CORPORATE SHOCKS, that drain more money from the credit unions to shore up the NCUSIF Fund.

Loans made in 2009 were $583 Million, in 2010 loans declined to $575 Million.

Credit Union Asset Group Size by Loans 2010

So what are the differences between banks and credit unions?

Check out this short video.

There are some major differences to be sure. Banks have typically done a better job of marketing and communicating to create their brand. Credit Unions on the other hand have a good story to tell, however most lack the marketing and branding skills of their banking brethren.
The numbers clearly indicate the dominance of the banks in the US compared to the Credit Unions. Credit Unions peaked at over 20,000 in the early seventies, today that number is just slightly below 7800 because of all the mergers that have taken place during this period. One can only assume that this trend will continue for both banks and credit unions. The big will be getting bigger.

To put size into perspective…Bank of America are as large in terms of asset size than ALL the Credit Unions combined. So what does that really tell us about Credit Unions? They service the community in which they reside, and do not have the broad reach like the banks.

Bank	Deposits ($ billions)	Market Share
Bank of America [1]	$835.9	11.9%
JPMorgan Chase [2]	$692.1	9.9%
Wells Fargo [3]	$680.3	9.7%
Citibank [4]	$263.8	3.8%
PNC Bank [5]	$174.6	2.5%
Top 5		37.7%
U.S. Bank	$127.8	1.8%
SunTrust Bank	$114.3	1.6%
Citizens Bank	$95.3	1.4%
Capital One	$88.9	1.3%
Regions Bank	$86.2	1.2%
Top 10		45.0%
… …
Total (8,451 banks)	$7,026	100%

Credit Union	Deposits ($ billions)	Market Share
Navy FCU [1]	$40.1	4.5%
State ECU[2]	$19.1	2.2%
Pentagon [3]	$13.9	1.6%
BECU [4]	$8.6	.10%
Schools First FCU [5]	$7.9	.09%
Top 5		8.49%
Golden CU	$7.5	.08%
Alliant CU	$6.7	.08%
Suncoast Schools	$5.6	.06%
Security Service	$5.4	.06%
American Airlines	$5.1	.05%
Top 10		8.82%
… …
Total (7,773 credit unions)	$885.9	100%

One can quickly surmise that the credit union industry is one of great fragmentation. The banking industry on the other hand wield quite a bit of power concentrated in the hands of a few.