Data Trends in Branching Suzanne McGann, Functional Analyst Janet Lee, Industry Analyst Callahan &...
-
Upload
violet-mcdonald -
Category
Documents
-
view
215 -
download
0
Transcript of Data Trends in Branching Suzanne McGann, Functional Analyst Janet Lee, Industry Analyst Callahan &...
Data Trends in Branching
Suzanne McGann, Functional AnalystJanet Lee, Industry Analyst
Callahan & Associates
• We are audio broadcasting so please plug in your headphones or computer speakers to listen in.
• If your audio is choppy or slow, you may wish to dial into the teleconference:
Dial: +1 (415) 655-0003Enter access code: 669 932 006#
Can you hear me?
Slide Link
Today’s slides can be found online at:
http://bit.ly/CallahanDataTrends
Use the
Questions Boxlocated on the right side of the screen, to type your comments or questions.
We Encourage Questions!
Leadership Team Development
Executive education to help your credit union's leadership team tackle strategic management challenges.
Callahan's Leadership Team Development brings collaborative learning to the credit union leadership ranks.
• Learn Together• Develop a Common Language• Hone Skills with Real World Case
Studies
Learn More: http://www.callahan.com/leadership-team-development/
The New BranchAnalyzer Is Here!
The new version of BranchAnalyzer is live. Sign in to your client portal at www.Callahan.com/Callahan-leadership to get started.
Added functionality and data sources will make it easier than ever to analyze and understand:
• Institutional Performance• Branch Trends• Local Competition• Strategic Growth Opportunities
Tell us what you think!
Please take our post-event survey. One lucky survey respondent will win a Starbucks gift card!
Data Trends in Branching
Suzanne McGann, Functional AnalystJanet Lee, Industry Analyst
Callahan & Associates
Agenda
• Differences in Reporting Requirements: Banks vs. Credit Unions
• Trends in Credit Unions and Banks’ Branching
• Trends in Deposits and Market Share
• Let’s Do a Case Study!
• Dive into our new BranchAnalyzer
Differences in Reporting Requirements:
Banks vs. Credit Unions
How do credit unions and banks report their branch and deposit data?
- When: Annually (data as of June; data is available around September)
- Where: FDIC’s The Summary of Deposits The Summary of Deposits (SOD) is an annual survey of branch office
deposits for all FDIC-insured institutions. - What: Branch and deposit information, including:
Bank name Branch name Branch service type Branch number Branch address Deposits by branch
Banks
How do credit unions and banks report their branch and deposit data?
- When: Quarterly- Where: NCUA’s Credit Union Branch Information- What: Branch information, including:
Credit Union name Branch name Branch Type (Branch office/Corporate office) Main office (Yes/No) Address and phone number
Credit Unions
Trends in Credit Unions and Banks’ Branching
Future of branches..?
The Buffalo News, June 7 ,2014
Gensler
The Financial Brand, February 5, 2014
WSJ, March 31,2013
Business Insider, October 27, 2015
Banks* are closing branches…
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201570,000
75,000
80,000
85,000
90,000
95,000
100,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
92,043
94,752
97,27499,163 99,550
98,519 98,19397,340
96,33994,725
93,283
Number of Bank Branches Number of Banks
Number of Banks and Bank BranchesData as of June 30
*Banks include both commercial banks and savings institutions
The effect of branch closures on local residents and communities
Inconvenience and costs
Financial exclusion
Limited choice in accessing finance
Branch Closure
Financial institution-free counties
• There are 22 U.S. counties that have neither banks nor credit unions.State County Total Population in the County in 2014
AK ALEUTIANS EAST 3,360AK DENALI 1,921AK HOONAH ANGOON 2,082AK LAKE AND PENINSULA 1,631AK WADE HAMPTON 8,010AK YUKON KOYUKUK 5,547AK ALPINE 1,116GA ECHOLS 4,003HI KALAWAO 89
MT PETROLEUM 485NV ESMERALDA 822NV STOREY 3,912ND SIOUX 4,422ND SLOPE 765SD BUFFALO 2,077SD MELLETTE 2,100TX BORDEN 652TX KENEDY 400TX KING 262TX LOVING 86UT DAGGETT 1,117WI MENOMINEE 4,522
A total of 22 counties 49,381
While the number of CUs is declining, the number of branches remains stable
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201510,000
12,000
14,000
16,000
18,000
20,000
22,000
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
20,172 20,47220,975 21,187 21,443 21,461 21,451 21,425
20,955 20,935 21,021
Number of Credit Union Branches Number of Credit Unions
Number of CUs and CU BranchesData as of June 30
Top 10 states with the highest number of credit union branches
Rank State Number of CU Branches as of June 2015
CU Deposit Market Share as of June 2015
1 Texas 1,664 9.4%
2 California 1,598 10.4%
3 New York 1,060 4.2%
4 Michigan 1,055 18.4%
5 Pennsylvania 1,037 9.3%
6 Florida 996 9.1%
7 Ohio 811 7.2%
8 Illinois 668 5.1%
9 Wisconsin 641 14.7%
10 North Carolina 625 10.9%
10 Year CAGR in number of branches
CUs Under $20M
CUs $20M-$100M
CUs $100M-$250M
CUs $250M-$500M
CUs $500M-$1B
CUs Over $1B
10 Year CAGR in # Branches
0.7% 2.0% 2.7% 2.7% 4.0% 4.8%
10 Year CAGR in Number of CU Branches by Asset SizeData as of June 30 for All Credit Unions that Are Active Today
CUs Under $20M
CUs $20M-$100M
CUs $100M-$250M
CUs $250M-$500M
CUs $500M-$1B
CUs Over $1B
10 Year CAGR in # Branches
-6.2% -2.2% 0.0% 1.7% 4.2% 9.5%
10 Year CAGR in Number of CU Branches by Asset SizeData as of June 30 for All Credit Unions that Have Existed
Number of credit union branches by asset size – for all credit unions that are active today
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
1,000
2,000
3,000
4,000
5,000
6,000
CUs Under $20M CUs $20M-$100M CUs $100M-$250MCUs $250M-$500M CUs $500M-$1B CUs Over $1B
Number of CU Branches by Asset SizeData as of June 30
Trends in Deposits and Market Share
Share balances close in on $1 trillion as members direct more savings to credit unions
$0
$200,000,000,000
$400,000,000,000
$600,000,000,000
$800,000,000,000
$1,000,000,000,000
$1,200,000,000,000
102568089497
201276209123306713591999
403195074908
503109569586
610516579910
735259909220822732345267
922109276339999499296576
Historical Share BalancesFor all U.S. Credit Unions
$100B increase every
two years since 2009
Credit Union Share Balances as of June 2015
$999,499,756,400
Share growth is on the rise with balances up $46.9 billion since June 2014
2010 2011 2012 2013 2014 2015$0
$10
$20
$30
$40
$50
$60
$70
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$47.5 $41.3 $61.8 $46.0 $31.1 $46.9
6.6%
5.4%
7.7%
5.3%
3.4%
4.9%
12-Mo. Change and Growth in Outstanding Share BalancesData as of June 30
12-Mo. $ Change in Outstanding Share Balances 12-Mo. % Change in Outstanding Share Balances
Billi
ons
Loan-to-share ratio is rising at credit unions
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
76.0% 75.4%
Loan-to-Share RatioData as of June 30
While change in net liquidity from share growth is still negative, it improved from a year ago
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-$40,000,000,000
-$30,000,000,000
-$20,000,000,000
-$10,000,000,000
$0
$10,000,000,000
$20,000,000,000
$30,000,000,000
$40,000,000,000
$50,000,000,000
-$19,232,741,271
.0-
$22,552,938,495.0
$7,542,763,847.0$2,830,958,254.
0
$34,567,530,906.0
$46,287,838,142.0$37,404,514,582
.0$39,542,911,596
.0
$8,717,179,630.0
-$30,922,371,080
.0
-$26,933,649,741
.0
Change in Net Liquidity from Share GrowthData as of June 30
Since 2007, cost of funds has declined
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
1.79%
3.11%
0.58%
Cost of FundsData as of June 30
Strong core deposit growth fuels growth in total shares
Total Shares
Share Certs.
IRA/Keogh
MMA
Share Drafts
Regular Shares
-4% -2% 0% 2% 4% 6% 8% 10%
3.4%
-2.4%
-1.3%
4.5%
6.8%
7.8%
4.9%
-0.1%
-1.5%
3.7%
8.5%
8.7%
YOY Growth by Share Product TypeData as of June 30
2Q152Q14
The percentage of members with a credit union checking account is on the rise
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
43.4%
54.7%
Share Draft PenetrationData as of June 30
Regular share is the largest component of credit unions’ share portfolio
13.9%
36.4%
22.8%
19.1%
7.7%
Credit Unions’ Share Portfolio as of June 2015
Share Drafts Regular Shares & Deposits Money Market SharesShare Certificates IRA/Keogh Accounts
Core deposits are a becoming a larger part of credit unions’ share portfolio
$0
$200,000,000,000
$400,000,000,000
$600,000,000,000
$800,000,000,000
$1,000,000,000,000
$ Share Drafts $ Regular Shares & Deposits $ Money Market Shares$ Share Certificates $ IRA/KEOGH Accounts
13.9%
36.4%
22.8%
19.1%
7.7%
9.0%
32.8%
18.7%
28.4%
11.1%
Historical Share CompositionData as of June 30
Money market deposits make up a half of banks’ share portfolio
14.2%
45.9%
20.8%
15.8%
3.2%Banks’ Share Portfolio as of June 2015
Demand Deposits Money Market DepositsOther Savings Deposits (excluding MMDAs) Total Time DepositsOther
Credit unions’ share growth lags that of banks
2008 2009 2010 2011 2012 2013 2014 20150.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
5.7%
4.9%
1.5%
5.2%
All Credit Unions in U.S. All Banks in U.S.
Annual Share GrowthData as of June 30
Credit union deposit market share has gradually declined since 2010
2008 2009 2010 2011 2012 2013 2014 20157.0%
7.5%
8.0%
8.5%
9.0%
9.5%
8.9%9.0%
9.3%9.1% 9.1%
8.9%8.7%
8.6%
Credit Union Deposit Market ShareData as of June 30
Top 10 states with the highest credit union deposit market share
Rank State Credit Union Deposit Market Share as of June 2015
YOY Change in Deposit Market Share
1 Alaska 29.8% -0.9%
2 District Of Columbia 24.6% 3.0%
3 Idaho 24.0% 1.6%
4 Washington 22.7% -0.8%
5 New Mexico 21.6% 0.5%
6 Hawaii 21.5% -0.5%
7 Oregon 21.4% -0.1%
8 Vermont 19.6% -0.8%
9 Michigan 18.4% 0.7%
10 New Hampshire 17.7% -1.0%
States that reported over 1ppt increase in credit union deposit market share
ID
NDMN
WI
IA
3.2 ppts
3.0 ppts
1.7 ppts
1.6 ppts
1.0 ppt
1.0 ppt
Let’s do a case study!
10 states with the highest # of bank branch closures – opportunities for credit unions?
State Number of Bank Closures June 2014 – June 2015
Total Number of Bank Branches as of June 2015
1 California 325 7,100
2 Texas 320 6,730
3 Florida 306 5,388
4 Pennsylvania 210 4,394
5 Michigan 209 2,743
6 South Carolina 208 1,324
7 Illinois 195 4,628
8 New York 186 5,262
9 Georgia 148 2,482
10 Ohio 143 3,839
Top 10 counties with the highest # of bank branch closures
County State Number of Bank Closures June 2014 – June 2015
Total Number of Bank Branches as of June 2015
1 Cook IL 80 1,518
2 Los Angeles CA 72 1,792
3 Harris TX 52 1,002
4 Dallas TX 42 646
5 Maricopa AZ 37 845
6 Tarrant TX 34 451
7 Miami-Dade FL 31 688
8 New York NY 30 693
9 Orange CA 30 683
10 San Diego CA 29 608
Case Study: Tarrant, TX
• County with the 6th highest number of bank branch closures (34) over the past year
• Total number of banks: 63• Total number of bank branches: 451• Total number of credit unions: 36• Total number of credit union branches: 81• Total deposits: $39.5 million• Total population: 1.9 million• Unemployment rate: 5.3% • Credit union deposit market share: 12.1%
How to benchmark your branch footprint using our new BranchAnalyzer
AR
Attend a Live BranchAnalyzer Training! Sign up here: http://www.callahan.com/branchanalyzer-training/
Questions?
Tell us what you think!
Please take our post-event survey. One lucky survey respondent will win a Starbucks gift card!
Thank You!
Janet Lee, Industry AnalystSuzanne McGann, Functional Analyst
202-223-3920 [email protected]