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Written by Cyndie Martini
on September 17, 2019

Credit Union branches declined 3.4% from mid-2017 to mid-2018, losing 646 deposit-taking branches, according to data provided by Credit Union Times. Texas saw the largest decrease, losing 98 branches with 1415 remaining. This was following by New York losing 29 branches with 885 remaining and California losing 24 branches with 1400 remaining. Bank branches outnumber credit union branches by nearly 5X (87,971 vs. 18,135). Bank branches experienced growth of 0.3% (296 branches) during this same period.

While credit union branches have declined, they've also become more efficient. Existing branches are deepening their customer relationships as well. As measured by the efficiency ratio, which is used to gauge how much it costs to generate a dollar of revenue, the number has declined from 80.6% in Q1 2014 to 78.1% in Q1 2019. That's a 2.5% decline in five years. The efficiency ratio peaked at 81.7% in Q1 2017.

Employees are becoming more productive, as well. In 2019, $1 spent on employee salaries and benefits generated $3.24 in revenue, which is a 3.2% increase over the last 12 months and 10.2% increase in the past five years ($2.94 in Q1 2014).

Customer relationships are deepening, as evidenced by the dollar amount per relationship. A Q1 2014 relationship generated $15,977 with $6,297 in loans and $9,680 in shares per member. In Q1 2019, the total relationship reached $19,156 with $8,400 in loans and $10,756 in shares per member, a 19.9% increase.

Despite these efficiencies, smaller credit unions still lag behind in digital service offerings to customers. Only 1.78% of credit unions with less than $10MM in assets offered remote deposit capture, compared to 97.2% of credit unions with over $1B in assets. Additionally, only 9.55% of this smaller group offered mobile banking compared to 99.06% of the larger group.

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