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TRANSCRIPT
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Data for June 30, 2018
Call Dates: August 22 & 23, 2018
1
Trendwatch 2Q 2018The Annual Report for the Industry
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Welcome!
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Visit www.callahan.com/cubrandmonitor to learn more.
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Empower the next generation of credit union members800-541-1500 | studentchoice.org/creditunions
In-School | Refinance | Custom Grad Counseling | iGrad | CollegePAYE Marketing | Performance | Compliance
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Today’s Lineup
Market UpdateJason Haley, Managing Director, Investment Management Group, ALM First
2Q 2018 Credit Union Trends & Key IssuesAlix Patterson, Partner, Callahan & Associates
Sam Taft, AVP, Analytics & Business Development, Callahan & Associates
A Business Intelligence Team that Drives ResultsSara Dolan, Chief Financial Officer, Michigan State University Credit Union
Presented By:Presented By:
ALM FIRST MARKET UPDATE
Callahan Quarterly Trendwatch August 22, 2018
Jason Haley
Managing Director, Investment Management Group
Jason HaleyManaging Director, Investment Management Group
Speaker
12
Economic Update
• U.S. dollar strength has sparked volatility in commodities and
emerging markets (EM) in recent weeks
– Turkish financial/economic crisis roiled emerging markets in
early August
– Metals and oil prices sharply lower on EM concerns and China,
which is unusual when global growth is above trend
• U.S. economic data trend has slowed relative to expectations
but remains consistent with solid overall growth
– Citi Surprise Index in negative territory for first time since
October 2017
– Q2 GDP growth above 4% for first time since 2014 and
underlying details were supportive for current quarter growth
– Biggest near-term headwind for growth continues to be potential
for outright trade war
13
Economic Update, cont.
• Fed Chair Jerome Powell will be speaking Friday morning at
the annual Jackson Hole symposium (Monetary Policy in a
Changing Economy)
• Current median FOMC forecast calls for 2 more rate hikes in
2018 and 3 hikes in 2019
– Markets priced for 2018 hikes, but priced for just over 1 hike in
2019
– Historic tendency for markets to underprice Fed hikes on the
back end of a tightening cycle
• Regarding future Fed communication/decisions, market
participants are more focused on Fed balance sheet
reduction, future demand for bank reserves in the context of
HQLA requirements, and the relationship between IOER and
the Fed’s target fed funds range
14
1515
Current Market Themes
15
• Curve flattening continues to be a major theme for 2018,
which is typical of a Fed tightening cycle
– Term premiums remain depressed amid central bank buying
• Interest rate volatility remains low, and spread widening has
slowed in recent months, both of which have been positive for
fixed-income performance (spread sectors relative to rates)
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
3.1
1M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 30Y
Treasury Yield Curve
5/16/2018 8/21/2018
8/21/2018 5/16/2018 Change
Tenor (%) (%) (bps)
3-Months 2.05 1.90 0.16
6-Months 2.23 2.08 0.15
1-Year 2.43 2.28 0.15
2-Year 2.60 2.59 0.02
5-Year 2.73 2.94 -0.21
10-Year 2.85 3.10 -0.25
30-Year 3.01 3.22 -0.21
Curves
2yr-5yr 0.12 0.35 -0.23
2yr-10yr 0.25 0.51 -0.27
2yr-30yr 0.41 0.63 -0.22
5yr-10yr 0.12 0.16 -0.04
Depository Performance Amid Rising Rates
16
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4KBW Bank Index
Price to Tangible Book Value
Source: Bloomberg
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Phone: 800.752.4628
Fax: 214.987.1052
www.almfirst.com
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Phone: 800.752.4628
Fax: 214.987.1052
www.almfirst.com
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Phone: 800.752.4628
Fax: 214.987.1052
www.almfirst.com
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Phone: 800.752.4628
Fax: 214.987.1052
www.almfirst.com
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Phone: 800.752.4628
Fax: 214.987.1052
www.almfirst.com
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Industry Overview
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Loans lead annual growth rates to surpass $1 trillion
As of 6/30/201812-mo. Growth
2Q1812-mo. Growth
2Q17
Assets $1,441.2B 5.9% 7.6%
Loans $1,013.5B 9.8% 10.8%
Shares $1,223.0B 5.5% 8.1%
Investments $360.0B -3.9% 1.7%
Capital $162.7B 6.5% 5.7%
Members 115.5M 4.4% 4.3%
Source: Callahan’s Peer-to-Peer Analytics
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Member growth accelerates for the 5th consecutive year
96.4 99.2 102.2 106.1 110.6 115.5
2.2%
2.9%3.1%
3.8%
4.3% 4.4%
-0.5%
0.5%
1.5%
2.5%
3.5%
4.5%
5.5%
70
75
80
85
90
95
100
105
110
115
120
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Mill
ion
s
Membership and Annual GrowthData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Over one fifth of consumers looking to finance a car turn to credit unions
14.7%16.3% 16.3%
18.4% 19.0%20.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Credit Union Auto Finance Market ShareData as of 6.30.18
AutoCount Data from Experian AutomotiveSource: Callahan’s Peer-to-Peer Analytics
Sponsored by:
First mortgage originations rise 2.1% year-over-yearB
illio
ns
Mortgage Bankers AssociationSource: Callahan’s Peer-to-Peer Analytics
$66.4 $41.4 $61.8 $62.9 $67.5 $68.9
7.0%6.8%
7.5%
7.0%
8.2%8.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
$0
$10
$20
$30
$40
$50
$60
$70
$80
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
First Mortgage Originations & Market ShareData as of 6.30.18
Sponsored by:
Revolving consumer loan balances up 9.8% annually.
$33.5 $34.9 $35.8 $37.4 $40.1 $43.3 $46.1 $49.7 $53.3 $58.6
3.6%
4.2%4.5% 4.6%
4.9%5.2% 5.3%
5.5% 5.6%5.8%
0%
1%
2%
3%
4%
5%
6%
7%
$0
$10
$20
$30
$40
$50
$60
$70
2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Revolving Consumer Loan Balances and CU Market ShareData as of 6.30.18
Source: Federal Reserve
Sponsored by:
Member relationships continue to widen
Credit Card Real Estate Share Draft Auto
17.3% 4.4%
52.1%
20.8%2Q18
2Q13
Change
15.4% 4.4%
57.5%
16.2%
+1.9% 0.0% +5.4% +4.6%
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Deeper lending relationships push AMR higher
$6,054 $6,447 $6,905 $7,326 $7,751 $8,186
$9,531 $9,566 $9,721 $10,036 $10,399 $10,495
$15,585 $16,013$16,626
$17,362$18,150 $18,682
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Average Member RelationshipData as of 6.30.18
Loans/Member Shares/Member
Source: Callahan’s Peer-to-Peer Analytics
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A Business Intelligence Team that Drives Results
Sara Dolan, Chief Financial Officer
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About Michigan State University FCU
• Headquartered in East Lansing, Michigan
• Approximately $4.1B in assets
• Over 259,000 members
• 806 employees
• 19 branch locations
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The Challenge
• Acting on member data is a growing imperative for credit unions
• We have a particularly fluid membership, as the world’s largest university-sponsored credit union
• Last year, student accounts represented just over 12% of new accounts we opened
• Students & former students represent just over 26% of total members
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The Solution
• We created the business intelligence department in 2014 to centralize data research, analysis, and reporting.
• We now have four specialists, plus an intern, with their own focus areas:
• The team is providing targeted lists for outreach efforts. They also analyze results to identify opportunities & mitigate risks.
• Predictive analytics and advanced techniques for identifying potential market opportunities are in development.
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How it Works
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Collaboration is Key
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Four Tips for BI Bliss
1. Ask “so what?” A chart or infographic can be beautiful, but the data must be presented in a way that the end user can make a decision.
2. Foster collaboration. BI should not operate in a silo, distribute reports, and make recommendations without discussion and input from the appropriate departments.
3. Foster transparency. Our intranet page shares information with all employees, but we also discuss various data reports in meetings throughout the organization.
4. Be curious and ask questions. Reflect on the data that is relevant to a decision and try to reduce the noise.
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Join today – first virtual meeting September 19th!
For more information contact:Charlotte Taft – [email protected]
https://community.tableau.com/groups/credit-unions
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Savings & Borrowing
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Share growth slows following 3 years of acceleration
$922 $953 $999 $1,073 $1,160 $1,223
6.1%
3.7%4.3%
6.7%
8.4%
5.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Total Share Balances and Annual GrowthData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
-$0.6 -$3.8$2.3
$8.3$6.4 $4.8
-$10
$0
$10
$20
$30
$40
$50
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Quarterly Share ChangeData as of 6.30.18
2Q net share growth falls for third consecutive year…
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
…pushing net liquidity change further negative
Source: Callahan’s Peer-to-Peer Analytics
-$21-$19
$6
$23
-$16
-$5-$7
$30
-$21-$19
-$12
$30
-$26-$30
-$20
-$10
$0
$10
$20
$30
$40
2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18
Bill
ion
s
Net Liquidity ChangeData as of 6.30.18
Quarterly Annual
* Net liquidity from shares= $ share growth - $ loan growth
Sponsored by:
Highest loan-to-share ratio since year-end 2008
67.4%
71.6%
75.4%
77.7%79.6%
82.9%
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
80.0%
85.0%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Loan-to-Share RatioData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Savings accounts increase $42.1B in past year
38.4%
15.8%
21.5%
6.3%
18.0%
Share CompositionData as of 6.30.18
Regular Shares &Deposits
Share Drafts
MMA
IRA/Keogh
Share Cert.
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Share certificates and regular shares accelerate
8.1%
9.4%
14.7%
6.9%
0.8%
4.6%
6.6%
9.7%
8.8%
1.9%
-1.0%
7.2%
-5% 0% 5% 10% 15% 20%
Total Shares
Regular Shares & Dep.
Share Drafts
MMA
IRA/Keogh
Share Certificates
12-Mo. Growth in Shares SegmentsData as of 6.30.18
2Q18
2Q17
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Certificates post largest gain since 1Q08
$87.0
$37.3
$23.0
$16.9
$0.6
$9.1
$76.9
$42.0
$15.8
$5.0
-$0.8
$14.9
-$20 $20 $60 $100
Total Shares
Regular Shares & Dep.
Share Drafts
MMA
IRA/Keogh
Share Certificates
Billions
12-Mo. Change in Share SegmentsData as of 6.30.18
2Q18
2Q17
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Sponsored by:
Banks start to pay their deposits
Source: Credit Suisse & WSJ
Sponsored by:
33.9%
38.4%
13.1%
15.8%
23.0%
21.5%
8.7%
6.3%
21.3%
18.0%
2Q13
2Q18
0% 20% 40% 60% 80% 100%
Total Shares OutstandingData as of 6.30.18
Regular Shares & Dep. Share Drafts MMA IRA/KEOGH Share Certificates
Core deposits make up 75.7% of share portfolio
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Total borrowings more than doubles over the past 5 years
$26.7 $34.8 $44.1 $47.3 $48.3 $53.9
2.5%
3.1%
3.7% 3.7%3.5%
3.7%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Total Borrowings and Borrowings/AssetsData as of 6.30.18
Total Borrowings Borrowings/Assets
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Participation sales are beginning to slow, but still growing
$1.7 $2.3 $3.4 $4.4 $4.7 $5.1
-9.3%
33.8%
50.4%
26.9%
8.2% 8.0%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Total Participations Sold and Annual GrowthData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Lending & Investments
Sponsored by:
Originations creep higher; 4th year in a row
$176.6 $166.4 $200.3 $218.4 $239.7 $255.5
12.4%
-5.8%
20.3%
9.1% 9.7%
6.6%
-6.0%
0.0%
6.0%
12.0%
18.0%
24.0%
$0
$50
$100
$150
$200
$250
$300
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
YTD Loan Originations and Annual GrowthData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
$94.0 $92.4
$111.0 $118.8
$125.9
$136.9
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18
Bill
ion
s
Quarterly Loan OriginationsData as of 6.30.18
Highest 2Q loan origination on record
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
1st mortgage originations rise while secondary market sales fall…
$66.4 $41.4 $61.8 $62.9 $67.5 $68.9
51.7%
32.0%
38.7% 37.6%33.8%
30.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
$0
$10
$20
$30
$40
$50
$60
$70
$80
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
YTD 1st Mortgage Originations & Secondary Market Sales as % of 1st Orig.Data as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
…Due to a higher percentage of ARM/Balloons
Source: Callahan’s Peer-to-Peer Analytics
$54.5 $25.7 $44.3 $43.1 $44.3 $44.2
$7.1
$9.2
$10.9 $13.0 $15.5 $16.7
$4.8
$6.5
$6.6 $6.7$7.7 $8.0
$0
$10
$20
$30
$40
$50
$60
$70
$80
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
YTD Mortgage Originations By TypeData as of 6.30.18
Fixed Balloon ARM
Sponsored by:
Sponsored by:
Loans top $1T despite modest slowing
$621.3 $682.0 $754.1 $833.3 $923.2 $1,013.5
5.4%
9.8%10.6% 10.5%
10.8%
9.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
$0
$200
$400
$600
$800
$1,000
$1,200
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Total Loans and Annual GrowthData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
$13.9
$20.8$23.5 $24.3
$27.8
$31.0
$0
$5
$10
$15
$20
$25
$30
$35
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Quarterly Loan ChangeData as of 6.30.18
$31B in loans added to the balance sheet in the last quarter
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
41.0%
8.4%
21.2%
13.9%
5.8%
9.7%
Credit Union Loan PortfolioData as of 6.30.18
1st Mortgage
Other RE
Used Auto
New Auto
Credit Cards
Other
New auto and 1st mortgage drive loan growth
Source: Callahan’s Peer-to-Peer Analytics
=
=
Sponsored by:
41.5%
41.0%
11.6%
8.4%
30.5%
35.1%
6.4%
5.8%
9.8%
9.7%
2Q13
2Q18
0% 20% 40% 60% 80% 100%
Total Loans OutstandingData as of 6.30.18
1st Mortgage Other RE Total Auto Credit Cards Other Loans
Auto concentration grow to over 1/3 of portfolio
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
10.8%
8.1%
11.9%
16.3%
6.0%
10.3%
9.8%
9.1%
10.0%
11.8%
5.2%
10.6%
0.0% 5.0% 10.0% 15.0% 20.0%
Total
Credit Card
Used Auto
New Auto
Other RE
1st Mtg
Annual Growth in Loans Outstanding Data as of 6.30.18
2Q2018
2Q2017
Credit card and 1st mortgage loan growth accelerates
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Banks face consumer lending challenges
Sponsored by:
59.2%
6.4%
9.0%
2.7%
18.3%
1.5% 2.9%
Credit Union Investment PortfolioData as of 6.30.18
US Govt., Fed. Agency, andOther Securities
Corporate CUs (incl. Cash)
Banks and S&Ls
Cash on Hand
Cash at FIs
Cash Equiv.
Other Inv & Insurance
Agencies and Fed Funds account for 77.5% of the portfolio
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
45.8%
59.3%
59.2%
28.6%
6.9%
6.4%
13.2%
12.1%
9.0%
2.7%
2.0%
2.7%
4.2%
15.4%
18.3%
2.7%
1.4%
1.5%
2.8%
2.9%
2.9%
2Q09
2Q13
2Q18
0% 20% 40% 60% 80% 100%
Historical Investment CompositionData as of 6.30.18
US Govt., Fed. Agency, and Other Sec. Corporate CUs (incl. Cash)Banks and S&Ls Cash on HandCash at FIs Cash Equiv.Other Inv & Insurance
Portfolios remain short
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Asset Quality
Sponsored by:
1.04%0.85%
0.74% 0.75% 0.75% 0.67%
3.09%
2.24%
1.69%1.49%
1.23% 1.23%*
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
DelinquencyData as of 6.30.18
Credit Unions Banks
Source: Callahan’s Peer-to-Peer Analytics*As of 1Q18
Largest annual drop in delinquency since 2015
Sponsored by:
Total 1st Mortgage Auto Other RE
Indirect Credit Card Member Commercial
0.67% 0.52% 0.55% 0.48%
0.55% 1.15%
0.08% 0.04% 0.04% 0.07%
0.06% 0.07%
Source: Callahan’s Peer-to-Peer Analytics
Annual Change in DelinquencyData as of 6.30.18
1.29%0.18%*
*Quarterly
Portfolio asset quality remains strong
Sponsored by:
Delinquency improves in nearly every segment
0.83%
1.15%
0.54%0.55%
1.36%
0.52%
1.07%
0.48%
1.89%
1.28%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Credit Union Delinquency Ratios by Loan TypeData as of 6.30.18
Credit Card Auto 1st Mortgage Other RE Member Commercial
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
0.58%
0.49%0.46%
0.51%0.56%
0.59%
0.73%
0.50%
0.42% 0.45%0.48% 0.48%*
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Net Charge-Off RatioData as of 6.30.18
Credit Unions Banks
Source: Callahan’s Peer-to-Peer Analytics*As of 1Q18
Net charge off ratio higher than banks for fourth consecutive year
Sponsored by:
Credit unions are well covered
86.2%
136.1%
63.6%
104.3%*
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Coverage Ratio: Allowance for Loan Losses/Delinquent LoansData as of 6.30.18
Credit Unions Banks
Source: Callahan’s Peer-to-Peer Analytics*As of 1Q18
Sponsored by:
The Bottom Line
Revenue and ROA rise. Credit union capital levels remain strong.
Sponsored by:
NCUSIF rebate drives other operating income growth 19.6%
$17.7 $18.4 $19.4 $21.1 $23.1 $26.2
$3.7 $3.6 $3.6$3.8
$4.1
$4.3
$3.6 $3.4$4.0
$4.3$4.6
$5.5
-0.9%
1.1%
7.0%8.0%
8.8%
13.2%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Total Revenue and Annual GrowthData as of 6.30.18
Interest Income Fee Income Other Operating Income YOY Growth
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Investment yield jumps 38 basis points, largest gain of any yield
1.07%
1.54%1.92%
0.67%
0.60% 0.70%
5.10%
4.50% 4.60%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Yield on Investments Cost of Funds Yield on Loans
Yield AnalysisData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Gap narrows with margin improvement
3.10% 3.07%3.10%
3.09%3.06%
3.11%
2.77%2.82% 2.83%
2.88%2.93%
3.08%
2.60%
2.70%
2.80%
2.90%
3.00%
3.10%
3.20%
3.30%
3.40%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Net Interest Margin vs. Operating Expense RatioData as of 6.30.18
Operating Expense Ratio Net Interest Margin
Source: Callahan’s Peer-to-Peer Analytics
3 bps
33 bps
Sponsored by:
Interest income gains and rebate push ROA higher YoY
As of 06.30.2018
As of06.31.2017
12-mo. Change (bps)
Interest Income/Avg. Assets 3.69% 3.46% +23
Interest Expense/Avg. Assets 0.62% 0.53% +9
Net Interest Margin 3.08% 2.93% +15
Non-Interest Income/Avg. Assets 1.41% 1.33% +8
Non-Interest Expense/Avg. Assets 3.11% 3.06% +5
Provision for Loan Losses 0.48% 0.43% +5
ROA 0.90% 0.77% +13
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
Largest annual jump in ROA since June 2011
0.84%
0.81% 0.81%
0.77% 0.77%
0.90%
0.70%
0.75%
0.80%
0.85%
0.90%
0.95%
2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
ROAData as of 6.30.18
Source: Callahan’s Peer-to-Peer Analytics
Sponsored by:
$88.6 $90.6 $96.8 $103.7 $112.3 $120.3 $129.2 $137.9 $147.7 $159.4
$7.6 $9.3$9.2
$8.6$7.8
$7.1$7.1
$7.6$8.2
$9.3
10.0%11.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
Bill
ion
s
Net Worth and AllowanceData as of 6.30.18
Net Worth Allowance Net Worth Ratio
Source: Callahan’s Peer-to-Peer Analytics
Net worth grows 8.0% as the ratio hits 11.0%
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