Arizona by xiangpeng

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									The Benefits of Membership



Customized Analysis of Member Benefits For:



                Arizona


                  June 2011



                   Prepared by:

      Credit Union National Association
       Economics and Statistics Department
                                                     Arizona
                              The Benefits of Membership
Credit unions generally provide financial benefits to members through lower loan rates, high
saving rates, and fewer fees than banking institutions.

The Credit Union National Association (CUNA) estimates that Arizona credit unions provided
$64,128,424 in direct financial benefits to the state’s 1,498,087 members during the twelve
months ending June 2011.
                                                                                       (1).
These benefits are equivalent to $43 per member or $81 per member household

Estimated total benefits of credit union membership are calculated by accounting for
differences in credit union and bank pricing. Specifically, average credit union savings account
yields, loan interest rates and fees are compared to average bank savings account yields, loan
interest rates and fees. The interest rate differences are then applied to respective average
credit union loan and savings balances. Fee differences are weighted and applied to credit
union non-interest income to obtain the total estimated benefits arising from fees.

The per-member and per-household benefits delivered by Arizona credit unions are
substantial. But, these benefits are averages. Mathematically, that means the total benefits
provided are divided across all members (or all member households) - even those who
conduct very little financial business with Arizona credit unions.

Consider this:

Financing a $25,000 new automobile for 60 months at a Arizona credit union will save
members an average $113 per year in interest expense compared to what they would
pay at a banking institution in the state.

Further, loyal members - those who use the credit union extensively - often receive total
financial benefits that are much greater than the average.

Arizona credit unions excel in providing member benefits on many loan and saving products.
In particular, Arizona credit unions offer lower average loan rates on the following accounts:
new car loans, used car loans, personal unsecured loans, first mortgage-adjustable
rate, .

Arizona credit unions also pay members higher average dividends on the following accounts: .




Source: Datatrac, NCUA, and CUNA.
(1)Assumes 1.9 credit union members per household.
                                 Recent Comparative Interest Rates for Loan Products
                                        Credit Unions vs. Banking Institutions
        16.00
                                                   15.01


        14.00
                                                                                                                          12.91
                                                                                                                              12.33
        12.00                                  11.62
                                                                                                                                               11.17
                                                                                                                                          10.30
        10.00
Rates




         8.00



         6.00            5.39           5.50
                                                                                             4.84 4.74     5.04
                  4.57           4.58                                                                             4.74
                                                                             4.24 4.10
                                                                      3.97
         4.00                                                  3.65



         2.00



         0.00
                60-month new 48-month used Unsecured loan      5-year      15-year fixed   30-year fixed Home equity /   Credit card -   Credit card -
                 car (A paper) car (A paper) (A paper)    adjustable rate    rate 1st        rate 1st     2nd mtg, 80%      classic         gold
                                                          1st mortgage, 0 mortgage, 0 pts mortgage, 0 pts   LTV 0 pts
                                                                 pts
                                                           Credit Unions     Banking Institutions
                                                   Recent Comparative Interest Rates for Savings Products
                                                           Credit Unions vs. Banking Institutions

                                                                                                                            0.43
                                    Retirement (IRA) accounts
                                                                                                                                     0.50




                                                                                                                                            0.56
                            1 Year certificate $10,000 balance
                                                                                                                                                      0.64
Type of Savings Product




                                                                                                       0.31
                                      Money market accounts
                                                                                                                  0.36




                                                                           0.12
                          Share draft checking, $5,000 balance
                                                                           0.12




                                                                                  0.15
                              Regular savings, $1,000 balance
                                                                                  0.15



                                                             0.00   0.10                 0.20      0.30              0.40          0.50        0.60          0.70
                                                                                                           Rates


                                                                           Banking Institutions   Credit Unions
                                              Selected June 2011 Fees
                                       Credit Unions vs Banking Institutions
$2,500.00

                                                                                            $2,280.00     $2,309.00




$2,000.00




$1,500.00




$1,000.00




 $500.00




               $25.00         $30.00                       $20.00             $35.00
   $0.00
            Share draft checking, NSF fee                      Credit cards, late fee       Mortgages, closing costs

                                               Credit Unions         Banking Institutions
                                                            Arizona
                                             Credit Union and Banking Instituion
                                    Mid-Year 2011 Average Interest Rates and Fees
                                                  Average Rate at           Average Rate           Rate Difference
Loan Products                                    Credit Unions (%)          at Banks (%)            vs. Banks (%)
60-month new car (A paper)                                        4.57                      5.39                     -0.82
48-month used car (A paper)                                       4.58                      5.50                     -0.92
Unsecured loan (A paper)                                         11.62                     15.01                     -3.39
5-year adjustable rate 1st mortgage, 0 pts                        3.65                      3.97                     -0.32
15-year fixed rate 1st mortgage, 0 pts                            4.24                      4.10                      0.14
30-year fixed rate 1st mortgage, 0 pts                            4.84                      4.74                      0.11
Home equity / 2nd mtg, 80% LTV 0 pts                              5.04                      4.74                      0.30
Credit card - classic                                            12.91                     12.33                      0.57
Credit card - gold                                               10.30                     11.17                     -0.88

Savings Products
Regular savings, $1,000 balance                                      0.15                   0.15                     -0.01
Share draft checking, $5,000 balance                                 0.12                   0.12                      0.00
Money market accounts                                                0.31                   0.36                     -0.06
1 Year certificate $10,000 balance                                   0.56                   0.64                     -0.08
Retirement (IRA) accounts                                            0.43                   0.50                     -0.07

Fee Income
Share draft checking, NSF fee                                   $25.00                  $30.00                   -$5.00
Credit cards, late fee                                          $20.00                  $35.00                  -$15.00
Mortgages, closing costs                                     $2,280.00               $2,309.00                  -$29.00

Source: Datatrac
                                            Estimated Total Loan Rate Benefit
                                           Credit Unions vs Banking Institutions
$20,000,000



                               $15,797,916

$15,000,000


               $11,588,338


$10,000,000
                                                  $8,757,982




 $5,000,000

                                                                    $2,381,532



         $0
               New car loans   Used car loans      Personal     5-year adjustable 15-year fixed rate 30-year fixed rate
                                                                                      -$659,035         -$870,902         Home equity /   Credit cards
                                                                                                                                           -$852,060
                                                unsecured loans rate 1st mortgage 1st mortgage         1st mortgage       2nd mortgage
                                                                                                                              loans

 -$5,000,000                                                                                                               -$4,185,052




-$10,000,000
                                                                       Types of Loan Products
                               Estimated Total Savings Dividend Benefit
                                 Credit Unions vs. Banking Institutions
                                      $0
        $0
              Regular shares     Share draft checking   Money market accounts     Certificate accounts   Retirement (IRA) accounts
                -$135,880



 -$500,000


                                                                                                                -$649,342



-$1,000,000




-$1,500,000
                                                                                      -$1,527,006




-$2,000,000



                                                             -$2,200,306


-$2,500,000

                                                        Type of Savings Product
                                                   Estimated Arizona Credit Unions Financial Benefits
                                                                                                            Mid-Year 2011

                                                                                                                                                       Rate            Total
                                                                                                                         Avg. Balance              Difference     Financial Benefit
                                                                                                                              at                   vs. Arizona        to Your
          Loans                                                                                                       Credit Unions (1)           Banks (%) (2)      Members
          New car loans                                                              1,404,646,979                                                    -0.82                $11,588,338
          Used car loans                                                             1,717,164,755                                                    -0.92                $15,797,916
          Personal unsecured loans                                                     258,347,548                                                    -3.39                 $8,757,982
          5-year adjustable rate 1st mortgage                                          756,041,954                                                    -0.32                 $2,381,532
          15-year fixed rate 1st mortgage                                              488,173,789                                                     0.14                  -$659,035
          30-year fixed rate 1st mortgage                                              829,430,936                                                     0.11                  -$870,902
          Home equity / 2nd mortgage loans                                           1,418,661,592                                                     0.30                -$4,185,052
          Credit cards                                                                 400,969,316                                                     0.57                  -$852,060
          Interest rebates in period                                                                                                                                                $3
          Total CU member benefits arising from lower interest rates on loan products:                                                                                     $31,958,722

          Savings
          Regular shares                                                                                                          2,717,590,944       -0.01                   -$135,880
          Share draft checking                                                                                                    1,235,792,348        0.00                          $0
          Money market accounts                                                                                                   4,000,556,491       -0.06                 -$2,200,306
          Certificate accounts                                                                                                    1,908,757,264       -0.08                 -$1,527,006
          Retirement (IRA) accounts                                                                                                 961,987,689       -0.07                   -$649,342
          Bonus dividends in period                                                                                                                                                   $0
          Total CU member benefit arising from higher interest rates on saving products:                                                                                    -$4,512,533

          Fee Income
          Total CU member benefit arising from fewer/lower fees:                                                                                                           $36,682,235


          Total CU member benefit arising from interest rates on loan and savings products and lower fees:                                                                 $64,128,424

          Total CU member benefit / member:                                                                                                                                           $43
          Total CU member benefit / member household:                                                                                                                                 $81


Source: Datatrac, NCUA, and CUNA
         (1) Average balance as of June 2011 and June 2010, according to the NCUA call report.; (2) Source for rates and fees: Datatrac;
                                                              Arizona
                                                        Performance Profile

Demographic Information                                                        June 11                              June 10
Number of branches                                                                 280                                  293
Total assets ($ mil)                                                            11,910                               12,402
Total loans ($ mil)                                                              7,016                                8,149
Total surplus funds ($ mil)                                                      4,492                                3,878
Total savings ($ mil)                                                           10,768                               11,139
Total members (thousands)                                                        1,441                                1,555
Growth Rates (Trailing 12 months) *
Total assets                                                                        -4.0    %                            -5.2    %
Total loans                                                                        -13.9    %                           -11.8    %
Total surplus funds                                                                 15.8    %                            13.5    %
Total savings                                                                       -3.3    %                            -4.1    %
Total members                                                                       -7.4    %                            -1.3    %
Earnings - Basis Pts. *
Yield on total assets                                                                445                                  501
Dividend/interest cost of assets                                                      48                                   80
Fee & other income                                                                   216                                  208
Operating expense                                                                    411                                  385
Loss Provisions                                                                      118                                  226
Net Income (ROA) after stabilization exp                                              84                                   -6
Capital adequancy
Net worth / assets                                                                    8.1                                  7.8
Asset quality *
Delinquencies / loans                                                               4.1                                  5.2
Net chargeoffs / average loans                                                      3.4                                  3.7
Total borrower-bankruptcies                                                       7,642                               11,364
Bankruptcies per 1000 members                                                       5.3                                  7.3
Asset/Liability Management
Loans / savings                                                                     65.2                                 73.2
Loans / assets                                                                      58.9                                 65.7
Long-term assets / assets                                                           35.0                                 33.1
Core deposits/shares & borrowings                                                   37.1                                 34.9
Productivity
Members/potentional members                                                         4.3                                  4.3
Borrowers/members                                                                  45.3                                 46.1
Members/FTE                                                                         355                                  367
Average shares/members ($)                                                        7,472                                7,162
Average loan balances ($)                                                        10,741                               11,362
Salary & Benefits/FTE                                                            58,356                               58,423

* Earnings, net chargeoffs, and bankruptcies are year-to-date numbers annualized. Due to significant seasonal variation, balance sheet growth
rates are for the trailing 12 months.

								
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