New Credit Union Growth Sprouts After Last Year’s Pruning

To the consternation of some, surprisingly, we reported earlier this year about the overall decline in the number of credit union branches in the United States. It was a strange week or so with some credit union leaders questioning the data we pulled directly from the NCUA. Despite the anti-dataers (?), the fact is that credit unions had a net loss of 100 branches in 2020. And honestly, that seems OK.

To begin, let’s take a closer look at the numbers. At the end of last year, credit unions had a total of 21,215 branches in all 50 states and U.S. territories. That is 449 fewer branches than in 2019.

If you look at all the states and territories, 35 of those reported branch numbers deteriorated, while 13 showed increases and six didn’t change at all.

The largest decline of credit union branches happened in the Pacific Region (Washington, Oregon and California) with a loss of 91. While every region reported branch losses, the eight-state Mountain Region (Montana to the north, down to Arizona and New Mexico to the south) only saw a decline of 15 branches.

At first glance, this sounds like bad news or maybe just a bit of concerning information. But, with cutting back comes new growth and new possibilities.

It’s like pruning a tree or that weird bush you have in your backyard. Every once in a while, you have to cut it back in order to let it grow.

As of late, the number of new branch openings, new branch builds, Field of Membership expansions, acquisitions of bank branches and credit unions merging has been an impressive pipeline of, what seems to be, real and significant growth.

When some fresh-smelling new credit union branch numbers came out in June, we found that about 160 credit unions were either announcing new branch openings or planning on new branch builds. These numbers completely reversed the course credit unions were on in 2020.

As of the end of March, we saw credit union branch numbers beginning to sprout up again with a total of 21,550.

From 2017 through 2019, credit unions added 182 branches. Was 2020 just a pandemic-related fluke as far as branch cutbacks?

Looking at the data and speaking with some credit union leaders, it seems 2020 was more of a time of reevaluating the footprint of credit unions. Do we need all of these branches? Are we in the right locations? Where is the true need in our communities?

Of late, large-, medium- and small-sized credit unions have made a big deal of announcing new branches and expanded service areas. Officials at the $6.7 billion Wright-Patt Credit Union announced its new expansion in the Columbus, Ohio area with a new and large “member center.” According to Wright-Patt, it will be the largest of its 36 branches.

Down in Louisiana, Campus Federal Credit Union unveiled plans to begin construction on a new two-story branch that takes up a whopping 27,519-square-foot footprint on a nearly 2.5-acre site the credit union purchased last year. According to reports, it’ll have 50 employees working out of this new site to take care of its mortgage lending and commercial lending operations. Impressive.

A few weeks ago, Lake Michigan Credit Union held its grand opening of the new 3,100 square-foot, full-service branch in Ada, Mich.

Out in Portland, Ore., the $8.4 billion OnPoint Community Credit Union is in the process of opening four new branches inside four locations of a local grocery chain, and plans to open four more in other locations of the same grocery chain in the coming months.

Just a bit farther to the north, the Olympia, Wash.-based Washington State Employees Credit Union has plans to open its fourth location in Spokane, while also refurbishing two other branches to meet the needs of its members.

Cross over to Chattanooga, Tenn., and you’ll find the $2.1 billion Tennessee Valley Federal Credit Union opened two new branches in the city.

The list of new and refurbished credit union branches opened or in progress of opening soon is really at a potential record-level of activity right now.

But, why?

Even though the pandemic unearthed an enormous demand for digital banking services, members appear to want it all – both in-person and I-don’t-need-to-come-to-your-branch-for-anything services. And credit unions as a whole appear to be giving members what they want – everything!

Good for you and good for the credit union system.

Personally, I haven’t stepped foot inside any of my credit union’s branches for three years. And that fits me just fine. The true need for branches might come down to the similar need/comfort that McDonald’s brings to many people.

You know when you’re on a long drive for hundreds of miles, you see a sign for the golden arches, and think, “Oh, finally … society still exists!” Even if you don’t eat there, it’s somewhat comforting to know it’s there for you when or if you need it, if not just for a bathroom break.

Credit unions appear to be doing an incredible job of growing from the pruning days of 2020. You’re offering better digital banking and mobile experiences. You’re upping your game with increasing the abilities of your branches to better fit and meet the needs of that important community you dedicated to serve.

And that dedication has paid off. For one last example, I want to point out the vision and focus of the $3.1 billion Numerica Credit Union in Spokane, Wash.

While Numerica, like so many others, is going through some branch renovations, officials there are seeing growth as a result of meeting members’ needs by fusing together branch service and digital banking.

According to local news reports, digital transactions by members compile nearly 85% of all transactions by the credit union. That is an incredibly huge number and therefore, that digital demand has translated into increasing its workforce by almost 600 people – just in the past seven months!

According to Numerica and some new member survey results, it has found a direct correlation between onsite and digital, with digital banking members expressing the “strongest affection for being able to access branch banking if necessary.”

It also reported about an 80% return of member transactions to its branches since the tsunami of branch closures that happened in 2020 during the pandemic.

Has Numerica cracked the code of fulfilling members’ needs for digital banking while expanding the branch footprint?

Last year gave us a lot to critically look at and analyze. Watching the results of the 2020 pruning season and what has blossomed from it is truly impressive. It has resulted in deeper roots for a more colorful and healthier future for most credit unions.

Michael Ogden is editor-in-chief for CU Times. He can be reached at mogden@cutimes.com.