Where Are We Going/Growing?
It’s not rocket science, but maps are really good at showing us who we are and where we’re going.
One of the many tabs I have open on my computer is a Google map of the United States. There are three states I’ve never visited: North Dakota, Alaska and Hawaii. I’m not one of those “got to visit all 50 states before I die” kind of person. It’s purely accidental that I’ve had the ability to visit 47 states during my credit union and non-credit union careers.
I do have an unofficial ranking of states and my interests. They are as follows:
- Best Food Overall – Louisiana.
- Best Beer – Texas.
- Best Cheese Curds – Wisconsin.
- Best Seafood – Maine.
- Best Biking – Colorado.
- Best Wine – California.
- Best Coffee – Washington, D.C.
In late May, the NCUA released its 2023 Q1 State-Level Credit Union Data Report. Of course, as I do with any report that includes a map, I checked it out to see how it compares to my “favorites” list.
Sadly, only two states on my list (Maine and Wisconsin) saw asset growth, according to the report. The other states on my list and Washington, D.C. saw an asset decline, ranging from -1.5% to -0.5.
The NCUA’s report stated, “While aggregate assets in federally insured credit unions continued to grow during the year ending in the first quarter of 2023, at the median, assets declined 0.1%. In other words, half of all federally insured credit unions had asset growth at or above negative 0.1% and half had asset growth of negative 0.1% or less. In the year ending in the first quarter of 2022, the median growth rate in assets was 5.2%.”
The highest growth in median assets was 7% in Idaho and 4.7% in Alaska, according to the NCUA’s data.
Of note, my experience with Idaho is that, at least during the summer months, they have the highest per-capita ratio of convertible cars or open-air Jeeps with dogs riding shotgun.
Where are assets struggling for credit unions?
“At the median, assets remained roughly unchanged in Arkansas and California and declined in 20 states and Washington, D.C. over the year ending in the first quarter of 2023,” according to the NCUA’s report. “Mississippi and New Jersey (both -2.8%) experienced the largest decline in median assets, followed by Delaware (-2.3%).”
Having visited family recently in my home state of Arkansas, I can see why credit unions are struggling. It’s a bank-heavy part of the country and finding a credit union can be tricky. Zero percent of my large family living there use credit unions.
Editor’s note: I dated a bank president’s daughter in high school. That’s how “banky” it is there.
When it comes to Mississippi, New Jersey and Delaware, all three are having a very tough time growing.
The data coming out of New Jersey, in particular, was interesting.
Officials at the Basking Ridge, N.J.-based Affinity Federal Credit Union ($4.6 billion in assets, 231,589 members) have been very busy with growing the credit union’s geographical footprint.
In the first quarter of 2023, credit unions added 34 branches around the country; four of those new branches came from Affinity.
During my travels, I’ve found New Jersey is a lovely state with a silly rap as that garbage area across the Hudson River from New York. Hoboken, I love you!
Delaware, I don’t have much to say except you have impressive mansions on the water. I have a feeling those mega-mansion owners aren’t credit union members. Mississippi, I feel, has similar struggles to Arkansas in that it’s very rural and credit unions just don’t seem to have the reputation to fully catch on.
Looking at the median annual share and deposit growth for Q1, the NCUA data revealed a drastic change from a year earlier.
“Nationally, shares and deposits continued to increase in the aggregate during the year ending in the first quarter of 2023, while the median growth in shares and deposits was negative 1.0%. In the year ending in the first quarter of 2022, the median growth rate in shares and deposits was 5.7%,” the report stated.
So, where are shares and deposits growing? Let’s look to the West.
“Over the year ending in the first quarter of 2023, median growth in shares and deposits was highest in Idaho (3.8%) and Wyoming (2.9%),” according to the NCUA.
Idaho, as noted before, has dogs in cars having the time of their lives. Growth there should be expected. Good dog!
Wyoming is an interesting area for growth. Not only can you drive 100 mph while racing to get to Colorado, the state has seen impressive branch growth during the pandemic. According to reporting from our Jim DuPlessis, Wyoming has seen the largest percentage increase (7.9%) in branches over the past three years. Wyoming is experiencing growth on growth on growth with assets, branches and deposits.
Both Idaho and Wyoming are on our radar at all times.
For the areas struggling with shares and deposits growth, we need to revisit previously-mentioned geographic spots.
“At the median, shares and deposits declined in Washington, D.C. and 36 states during that time, led by Delaware (-3.7%) and Mississippi (-3.6%),” stated the NCUA in its report.
For this data point, it was hard to not see a decline from 2022 levels. I feel like we can cut credit unions some slack except to simply note that 36 states and Washington, D.C. saw declines. That’s a lot of our country.
I’d expect these numbers to even out, as we shouldn’t see as many pandemic-related drastic highs and lows as 2023 continues. Of course, that thought is based on the U.S. government not shutting down and us not defaulting.
Lastly, I want to look at the membership growth map. Overall, according to the NCUA, membership only increased 0.2% at the median ending in Q1.
The West continued to prop up any overall positive results for the rest of the country as “credit unions headquartered in Alaska (5.9%) and Nevada (3.4%) experienced the strongest median membership growth.”
Included in the membership growth areas are Arizona, New Mexico, Wyoming and Idaho.
According to my travels, New Mexico and Arizona are beautiful states that are weirdly expensive to live in. I’m looking at you Santa Fe and Tucson. Also, I know of at least four credit union executives who’ve moved their families to those states and love it out there.
What credit unions are struggling with membership growth? The NCUA gives us a not-surprising answer: “Credit unions with falling membership tend to be small; over 60% had less than $50 million in assets in the first quarter of 2023.”
Looking at the map, you can see those areas roughly include all of the South, the middle of the Great Plains, the Midwest and New England – basically the entire country west of the Rocky Mountains.
With all of these maps showing the economic data points for credit unions, what does it tell us?
If you go back in history, the maps keep telling us the same story: Our country’s poor areas remain poor. Our country’s wealthy areas sometimes struggle, but remain wealthy. The open spaces of the West are becoming less and less open as our population looks for cheaper land.
Our credit unions seem to grow as our country grows – regionally.
It’s not rocket science, but maps are really good at showing us who we are and where we’re going.
Michael Ogden Editor-in-Chief mogden@cutimes.com