The Benefits of Membership
Customized Analysis of Member Benefits For:
Nebraska
June 2011
Prepared by:
Credit Union National Association
Economics and Statistics Department
Nebraska
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 Nebraska credit unions
provided $18,761,618 in direct financial benefits to the state’s 428,333 members during the
twelve months ending June 2011.
(1).
These benefits are equivalent to $44 per member or $83 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 Nebraska 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 Nebraska credit unions.
Consider this:
Financing a $25,000 new automobile for 60 months at a Nebraska credit union will save
members an average $129 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.
Nebraska credit unions excel in providing member benefits on many loan and saving
products. In particular, Nebraska credit unions offer lower average loan rates on the following
accounts: new car loans, used car loans, personal unsecured loans, first mortgage-
adjustable rate, home equity loans, credit cards loans.
Nebraska credit unions also pay members higher average dividends on the following
accounts: regular savings, share draft checking, money market accounts, certificate
accounts, IRAs.
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
14.00 13.52
12.64
12.00
10.51 10.64
10.03
10.00
9.21
Rates
8.00
5.93 6.01
6.00 5.26
5.00 4.84 4.74 4.97 4.99
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
0.78
Retirement (IRA) accounts
0.67
0.98
1 Year certificate $10,000 balance
0.87
Type of Savings Product
0.58
Money market accounts
0.46
0.29
Share draft checking, $5,000 balance
0.19
0.33
Regular savings, $1,000 balance
0.25
0.00 0.20 0.40 0.60 0.80 1.00 1.20
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
Nebraska
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) 5.00 5.93 -0.94
48-month used car (A paper) 5.26 6.01 -0.76
Unsecured loan (A paper) 10.03 10.51 -0.48
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 4.97 4.99 -0.02
Credit card - classic 12.64 13.52 -0.88
Credit card - gold 9.21 10.64 -1.44
Savings Products
Regular savings, $1,000 balance 0.33 0.25 0.08
Share draft checking, $5,000 balance 0.29 0.19 0.10
Money market accounts 0.58 0.46 0.12
1 Year certificate $10,000 balance 0.98 0.87 0.11
Retirement (IRA) accounts 0.78 0.67 0.11
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
$6,000,000
$5,000,000 $4,845,478
$4,000,000
$3,000,000
$2,146,388
$2,000,000
$992,418
$1,000,000
$492,694
$370,529
$59,446
$0
New car loans Used car loans Personal 5-year adjustable 15-year fixed rate 30-year fixed rate
-$153,229 Home equity / Credit cards
-$267,873
unsecured loans rate 1st mortgage 1st mortgage 1st mortgage 2nd mortgage
loans
-$1,000,000
Types of Loan Products
Estimated Total Savings Dividend Benefit
Credit Unions vs. Banking Institutions
$900,000
$824,994
$800,000 $774,523
$700,000
$600,000
$500,000
$400,000 $372,982 $377,155
$288,202
$300,000
$200,000
$100,000
$0
Regular shares Share draft checking Money market accounts Certificate accounts Retirement (IRA) accounts
Type of Savings Product
Estimated Nebraska Credit Unions Financial Benefits
Mid-Year 2011
Rate Total
Avg. Balance Difference Financial Benefit
at vs. Nebraska to Your
Loans Credit Unions (1) Banks (%) (2) Members
New car loans 229,560,214 -0.94 $2,146,388
Used car loans 641,785,174 -0.76 $4,845,478
Personal unsecured loans 77,193,516 -0.48 $370,529
5-year adjustable rate 1st mortgage 315,053,405 -0.32 $992,418
15-year fixed rate 1st mortgage 198,424,518 0.14 -$267,873
30-year fixed rate 1st mortgage 145,932,317 0.11 -$153,229
Home equity / 2nd mortgage loans 297,231,487 -0.02 $59,446
Credit cards 48,362,562 -0.88 $492,694
Interest rebates in period $296,530
Total CU member benefits arising from lower interest rates on loan products: $8,782,381
Savings
Regular shares 1,031,242,086 0.08 $824,994
Share draft checking 392,612,192 0.10 $372,982
Money market accounts 314,295,568 0.12 $377,155
Certificate accounts 737,640,494 0.11 $774,523
Retirement (IRA) accounts 256,179,594 0.11 $288,202
Bonus dividends in period $0
Total CU member benefit arising from higher interest rates on saving products: $2,637,854
Fee Income
Total CU member benefit arising from fewer/lower fees: $7,341,382
Total CU member benefit arising from interest rates on loan and savings products and lower fees: $18,761,618
Total CU member benefit / member: $44
Total CU member benefit / member household: $83
Source: Datatrac, NCUA, and CUNA
(1) Average balance as of June 2011 and June 2010, according to the NCUA call report.; (2) Source for rates and fees: Datatrac;
Nebraska
Performance Profile
Demographic Information June 11 June 10
Number of branches 152 157
Total assets ($ mil) 3,308 3,143
Total loans ($ mil) 2,130 2,066
Total surplus funds ($ mil) 1,042 948
Total savings ($ mil) 2,852 2,685
Total members (thousands) 432 424
Growth Rates (Trailing 12 months) *
Total assets 5.3 % 8.7 %
Total loans 3.1 % 3.7 %
Total surplus funds 9.9 % 21.5 %
Total savings 6.2 % 10.9 %
Total members 1.9 % 2.5 %
Earnings - Basis Pts. *
Yield on total assets 437 521
Dividend/interest cost of assets 96 128
Fee & other income 141 122
Operating expense 392 374
Loss Provisions 39 37
Net Income (ROA) after stabilization exp 50 83
Capital adequancy
Net worth / assets 10.7 10.9
Asset quality *
Delinquencies / loans 0.9 1.3
Net chargeoffs / average loans 1.0 0.5
Total borrower-bankruptcies 1,286 1,362
Bankruptcies per 1000 members 3.0 3.2
Asset/Liability Management
Loans / savings 74.7 76.9
Loans / assets 64.4 65.7
Long-term assets / assets 27.4 27.2
Core deposits/shares & borrowings 51.6 48.8
Productivity
Members/potentional members 5.8 5.7
Borrowers/members 44.6 43.5
Members/FTE 353 352
Average shares/members ($) 6,598 6,328
Average loan balances ($) 11,052 11,182
Salary & Benefits/FTE 53,440 51,122
* 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.