Billion-Dollar CUs Hold 29.3% Of Total Assets

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The days when having a billion dollars in assets meant you were in exclusive company among credit unions are over. Eleven more credit unions crossed the billion-dollar asset threshold during 2003, bringing the total number to 83 at year-end.

According to Callahan & Associates, which has published its first-ever guide to billion-dollar credit unions, their combined assets of $183-billion account for 29.3% of total credit union assets.

"Their 12.1% growth rate sets the pace for the industry," said Callahan EVP Jay Johnson. "They continue to lead not only in size, but by virtually every performance measure including profitability and operating efficiency. For all these reasons, we feel that now is the right time to begin focusing on them as a group."

Callahan's focus on billion-dollar credit unions is reflected in its publication of a new guide dedicated solely to credit unions of that asset size.

By far, the largest number of large credit unions can be found in California, which has 21 credit unions of $1 billion or more in assets. Texas is second with nine billion-dollar CUs, New York third with eight, and Florida fourth with seven.

Meanwhile, separate analysis of credit union performance during 2003 has found that four sources are the primary drivers of non-interest income. According to a new survey, those four sources are: non-sufficient funds (NSF) and courtesy pay program fees, real estate lending fees, credit card interchange fees, and debit interchange fees.

The survey, conducted by Callahan & Associates and comprising credit unions with non-interest income representing 13.5% of the industry's overall income from non-interest sources in 2003, found that non-interest income reached its highest level in 2003 with more than $6.6 billion generated, a 19.4% growth over 2002, and $600 million more than credit union net income for the year.

The survey further found that real estate lending fees surged during the year, unseating debit interchange fees as the second largest source of revenues, a position it had occupied in a similar survey of credit union non-interest income taken by Callahan's at mid-year covering through the second quarter.

"The debit interchange component went down slightly as a settlement put into effect in August reduced debit interchange fees by one-third," explained Johnson. "And the last two quarters of 2003 saw unprecedented real estate volume, both in terms of originations and sales to the secondary market, markedly increasing real estate lending fees as a share of non-interest income."

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