The Benefits of Membership
Customized Analysis of Member Benefits For:
Florida
March 2011
Prepared by:
Credit Union National Association Economics and Statistics Department
Florida 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 Florida credit unions provided $297,036,882 in direct financial benefits to the state’s 4,543,541 members during the twelve months ending March 2011. These benefits are equivalent to $65 per member or $124 per member household
(1).
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 Florida 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 Florida credit unions. Consider this: Financing a $25,000 new automobile for 60 months at a Florida credit union will save members an average $146 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. Florida credit unions excel in providing member benefits on many loan and saving products. In particular, Florida 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. Florida 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 14.00
13.26 12.70 12.72
12.00
11.40 10.91
10.86
10.00
Rates
8.00 6.02
6.00
5.33 4.27
5.16 4.57
4.37
4.51
5.11
4.46
4.46
4.89
3.90
4.00
2.00
0.00 60-month new car (A paper)
48-month used car (A paper)
Unsecured loan (A paper)
5-year adjustable rate 1st mortgage, 0 pts
15-year fixed 30-year fixed Home equity / Credit card rate 1st rate 1st 2nd mtg, 80% classic LTV 0 pts mortgage, 0 mortgage, 0 pts pts
Credit Unions Type of LoanBanking Institutions Product
Credit card gold
Recent Comparative Interest Rates for Credit Unions Saving Products Credit Unions vs. Banking Institutions 0.62 Retirement (IRA) accounts 0.78
0.77 Type of Saving Products
1 Year certificate $10,000 balance 0.93
0.47 Money market accounts 0.62
0.17
Share draft checking, $5,000 balance
0.18
0.22 Regular savings, $1,000 balance 0.28
0.00
0.10
0.20
0.30
0.40
Credit Unions
0.50 Rates
0.60
0.70
Banking Institutions
0.80
0.90
1.00
Selected March 2011 Credit Union Fees compared to Banking Institutions $2,500
$2,309.00
$2,280.00
Dollar Amount
$2,000
$1,500
$1,000
$500
$25.00
$20.00
$30.00
$35.00
$0
Florida
Area Banks Types of Fee Income
Share draft checking, NSF fee
Credit cards, late fee
Mortgages, closing costs
Florida Credit Union and Banking Instituion First-Quarter 2011 Average Interest Rates and Fees Loan Products 60-month new car (A paper) 48-month used car (A paper) Unsecured loan (A paper) 5-year adjustable rate 1st mortgage, 0 pts 15-year fixed rate 1st mortgage, 0 pts 30-year fixed rate 1st mortgage, 0 pts Home equity / 2nd mtg, 80% LTV 0 pts Credit card - classic Credit card - gold
Average Rate at Credit Unions (%)
Average Rate at Banks (%)
Rate Difference vs. Banks (%)
4.27 4.57 10.91 3.90 4.51 5.16 4.46 12.70 10.86
5.33 6.02 13.26 4.37 4.46 5.11 4.89 12.72 11.40
-1.07 -1.46 -2.35 -0.47 0.05 0.05 -0.43 -0.02 -0.54
0.28 0.18 0.62 0.93 0.78
0.22 0.17 0.47 0.77 0.62
0.06 0.01 0.15 0.16 0.16
$25.00 $20.00 $2,280.00
$30.00 $35.00 $2,309.00
-$5.00 -$15.00 -$29.00
Savings Products Regular savings, $1,000 balance Share draft checking, $5,000 balance Money market accounts 1 Year certificate $10,000 balance Retirement (IRA) accounts
Fee Income Share draft checking, NSF fee Credit cards, late fee Mortgages, closing costs Source: Datatrac
Estimated Credit Union Loan Rate Benefits vs. Banking Institutions $70,000,000
$64,059,109 $60,000,000
$50,000,000
$42,299,676 Dollar Amount
$40,000,000
$30,000,000
$21,363,147 $20,000,000
$15,519,777 $10,000,000
$16,810,128 -$1,286,830
$0
New car loans -$10,000,000
Used car loans
Personal unsecured loans
5-year adjustable rate 1st mortgage
-$2,392,120
15-year fixed 30-year fixed Home equity / Credit cards 2nd mortgage rate 1st rate 1st loans mortgage mortgage
Types of Loan Products
$3,409,682
Estimated Credit Union Savings Dividend Benefits vs. Banking Institutions $18,000,000
$15,659,323
$16,000,000
$14,000,000
Dollar amount
$12,000,000
$11,373,062
$10,000,000
$8,000,000
$6,063,490
$5,991,743 $6,000,000
$4,000,000
$2,000,000
$446,441
$0 Regular shares
Share draft checking
Money market accounts
Types of Saving Products
CUNA Economics and Statistics Department
Certificate accounts
Retirement (IRA) accounts
Estimated Florida Credit Unions Financial Benefits First-Quarter 2011
Loans
Avg. Balance at
Rate Difference vs. Florida
Total Financial Benefit to Your
Credit Unions (1)
Banks (%) (2)
Members
New car loans 3,971,800,578 Used car loans 4,402,687,936 Personal unsecured loans 909,070,102 5-year adjustable rate 1st mortgage 3,337,586,447 15-year fixed rate 1st mortgage 2,339,690,539 30-year fixed rate 1st mortgage 4,349,308,950 Home equity / 2nd mortgage loans 3,909,332,094 Credit cards 2,351,504,792 Interest rebates in period Total CU member benefits arising from lower interest rates on loan products:
-1.07 -1.46 -2.35 -0.47 0.05 0.05 -0.43 -0.02
$42,299,676 $64,059,109 $21,363,147 $15,519,777 -$1,286,830 -$2,392,120 $16,810,128 $3,409,682 $2,772 $159,785,342
0.06 0.01 0.15 0.16 0.16
$5,991,743 $446,441 $11,373,062 $15,659,323 $6,063,490
Savings Regular shares Share draft checking Money market accounts Certificate accounts Retirement (IRA) accounts
10,894,078,519 4,464,410,794 7,582,041,254 9,787,077,062 3,911,929,220
Bonus dividends in period Total CU member benefit arising from higher interest rates on saving products:
$0 $39,534,060
Fee Income Total CU member benefit arising from fewer/lower fees:
$97,717,481
Total CU member benefit arising from interest rates on loan and savings products and lower fees:
$297,036,882
Total CU member benefit / member: Total CU member benefit / member household:
Source: Datatrac, NCUA, and CUNA (1) Average balance as of March 2011 and March 2010, according to the NCUA call report.; (2) Source for rates and fees: Datatrac;
$65 $124
Florida Performance Profile Demographic Information Number of branches Total assets ($ mil) Total loans ($ mil) Total surplus funds ($ mil) Total savings ($ mil) Total members (thousands)
Mar 11 927 43,126 25,962 15,537 37,459 4,548
Mar 10 888 42,706 27,537 13,536 37,046 4,568
Growth Rates (Year-to-date) Total assets Total loans Total surplus funds Total savings Total members
2.7 -1.8 11.6 2.9 0.5
Earnings - Basis Pts. Yield on total assets Dividend/interest cost of assets Fee & other income * Operating expense Loss Provisions Net Income (ROA) after stabilization exp *
418 84 169 343 104 52
461 123 161 338 166 -6
Capital adequancy Net worth / assets
9.5
9.4
Asset quality Delinquencies / loans Net chargeoffs / average loans Total borrower-bankruptcies Bankruptcies per 1000 members
3.0 1.8 28 1.1
3.0 2.3 40 1.6
69.3 60.2 32.5 43.0
74.3 64.5 31.0 39.4
3.6 46.4 370 8,236 12,309 57,142
3.8 48.5 359 8,111 12,432 54,572
Asset/Liability Management Loans / savings Loans / assets Long-term assets / assets Core deposits/shares & borrowings Productivity Members/potentional members Borrowers/members Members/FTE Average shares/members ($) Average loan balances ($) Salary & Benefits/FTE
% % % % %
0.3 -2.6 6.2 0.8 0.2
% % % % %