The number of Federally-Insured credit unions was cut by nearly 15% in the 5 years ended March 31, 2023, yet membership climbed more than 20%.

The big keep getting bigger while the small fight to survive. Fifty-one 5-star credit unions listed on page 5 of this week's Jumbo Rate News each opened at least two new branch offices between March 31, 2022 and March 31, 2023. Each also has assets of less than $10 billion.

Other Resources: Bauer's LLAMAS Report Bundle provides a 5 quarters of data side-by-side to easily track a credit union's growth along with graphs and ratios comparing it to its peers.

Because People Still Need/Want that Human Touch

5-Star Navy Federal Credit Union, headquartered in Vienna, VA, currently operates more than 350 offices across the U.S. and the globe. Boasting more than $166 billion in assets, Navy FCU is not only the nation’s largest U.S. credit union, it is more than three times larger than the #2.

The bigger it gets, the faster Navy FCU grows. It just celebrated its 13 millionth member in July, less than one year after reaching 12 million members. That is the way things are going for our nation’s credit unions. The big keep getting bigger while the small fight to survive.

For example, at March 31, 2013, only 423 federally-insured credit unions had total assets exceeding $500 million. Fast forward ten years and 426 have exceeding $1 billion; 712 exceed $500 million.

At  the other end of the spectrum, 2,279 credit unions had assets of less than $10 million in 2013. Today that number is down to 950. We can blame inflation for some of this since all asset sizes are growing. Let’s compare the last 5 years:

In those five years, the industry lost 15% of its institutions, but it gained over 50% in assets, shares/deposits and loan balances. That’s pretty impressive.

Navy FCU dwarfed that growth in all categories, and it did so without the aid of an acquisition.

In the 12 months ended March 31, 2023, Navy FCU added 11 new branch offices, organically, and it shows no signs of slowing down.

In fact, 769 (16%) of credit unions  indicated plans to add at least one new branch in the 12 months ending March 31, 2024. Why?

Because people do still want, and sometimes need, that human touch. But, just as with banks, there has been a net loss of credit union branches. There has also been a fair share of mergers and acquisitions. We mentioned that there were five credit unions that would have been listed on page 5 except they have assets exceeding $10 billion. One was Navy FCU. Of the other four, two grew via acquisition and two grew organically.

The nation’s 2nd largest C.U., 5-Star State Employees’ C.U., Raleigh, NC added two new branches, organically, bringing its total number of offices to 285; they are all in NC.

The #9 (by assets) 5-Star First Technology FCU, San Jose, CA added three new locations. It now operates 40 offices mostly in CA, OR and WA but has locations dotted around the states as well.

5-Star Pentagon FCU, McLean, VA, the 3rd largest C.U., conversely, has been on a shopping spree for years. It acquired two credit unions in 2022, three in 2021, one of which was a failure, one in 2020, three in 2019, and plenty of others before that. As a result, it now operates through 56 branches dotted across the U.S. plus one in Okinawa.

Finally, 5-Star GreenState C.U., N. Liberty, IA, (#20 by assets) is not quite the serial acquirer that Pentagon is, but it has acquired two C.U.s in the last three years. What put it on this list was the acquisition of Midwest Community Bank, Freeport City, IL last July (2022).

As we were working on this week’s article, a major fire broke out decimating the town of Lahaina on the western side of Maui in Hawaii. While we’re pretty sure you’ve heard about the devastation, what you may not know is that  the residents of Hawaii love their credit unions. With a total population of about 1.4 million, over 866,000 (or about 62%) are members of a credit union. (The national average is less than 42%.)

Hawaii is home to just seven banks and, while six out-of-state banks also operate branches on the island chain, that number pales in comparison to the 48 credit unions that call Hawaii home. In Hawaii they say, “E Kōkua Pākahi Kākou,” which means "We help each other." That’s also the credit union way. Together, they will get through this.

All branches in Lahaina and surrounding areas are closed at this writing, some sadly, will have to be rebuilt altogether.