Make better lending decisions through data analysis education.

Scorecard Series: Call Report Peer Trends

This final entry in this blog series is a bit different. Instead of reviewing a scorecard, we’re going to take the general information statistics from the call report scorecards and analyze the peer trended plots. For these statistics we will be looking between 2004 and 2016. Keep in mind that with these upcoming plots, the actual numbers (along the y-axes) are not the focus. The most important takeaways are the trends, or rather, how the numbers change over time. While the other scorecards give key insights to what’s happening within the credit union space, this blog will go in a little deeper to discover what’s going on under the hood, so to speak.

This first set of plots shows how each peer group’s number of credit unions has changed over time. As we see below, peer groups one, two, and three have consistently declined since 2004. Group four experienced a sharp increase in the early part of this decade, but has since sharply declined, though, it appears that the number of credit unions for peer group four might currently be leveling out. Peer groups five and six have shown strong growth over the entire period. We know from the call report trend scorecard that credit unions as a whole are declining in number, so groups one through four are declining faster than groups five and six are growing, showing the overall decline.

The next group of plots shows the aggregate number of members for each peer group. Groups one through five have shown strong decreases over the past decade. However, peer group six seems to be increasing consistently. This set of plots is interesting because the trends scorecard showed us that as a whole, membership is on the rise. This implies that peer group six’s growth is so strong that it is carrying the industry. Not only is it making up for the decline from groups one through five, but it’s also going above and beyond that to show growth for the combined industry.

Now we’ll look at the member to credit union ratio for each peer group. Like the aggregate membership plots, groups one through five are showing declines in the ratio over the past decade, and group six is showing increases. Since groups one through four are declining in both membership and number of credit unions, this implies that membership for these groups is decreasing at a faster rate than the number of credit unions are decreasing. Group five’s member to credit union ratio is naturally decreasing, since membership is decreasing while the number of credit unions is increasing. Group six, however, is experiencing growth in membership, number of credit unions, and in the member to credit union ratio. This implies that groups six’s membership is growing at a faster rate than the number of credit unions is.

With the next set of plots, we are looking at the aggregate number of borrowers for each peer group. Keep in mind that there appear to be a few outliers here and there. If we ignore the clear outlier for Q1 2016 for peer group 4, we see that groups one through four are experiencing declines in their borrower counts. While group five was showing a decline until about 2012, it is now showing an increase. Group six shows a strong increase for the entire time period. Again, we know from the trends scorecard that the overall borrower count for the industry is on the rise. Like the number of credit unions, groups five and six are carrying the industry for this statistic.

The next set of plots show the aggregate borrower to member ratio broken down by peer groups. Again, we see a few outliers, so be cautious of those observations. Since about 2012, we see that all six peer groups show increases in this ratio. For groups one through four, we know that borrowers and membership are both on the decline. Since the borrower to membership ratio is on the incline, this implies that membership is declining at a faster rate than borrowers. Group five’s borrower count is increasing while membership is decreasing, so the borrower to membership ratio is naturally increasing with gusto. Both borrower count and membership are increasing for group six, and since the ratio is increasing, this implies that the borrower count is increasing at a faster rate than membership (this increase looks quite sharp as well).

In summary, we can see that in terms of number of credit unions, the industry is narrowing. In terms of membership and borrowers, we are seeing overall growth. However, when we break things down by peer groups, we see that the larger asset groups seem to be driving most of the growth. Without grouping credit unions by asset size, we would not have been able to detect such insights.

Product Manager

**RELATED POSTS**

Make better lending decisions through data analysis education.

© Copyright 2017 Visible Equity | Privacy Policy | Website Design by SmartBug Media

## COMMENTS