Nebraska

Document Sample
Nebraska Powered By Docstoc
					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.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:11
posted:11/30/2011
language:English
pages:10