Money Markets Grab Biggest Share

Credit unions with more than $50 million in assets now represent more than $400 billion in total assets, or 84% of all credit union assets as of June 30.

Analysis by Callahan & Associates conducted as part of its Return of the Member (ROM) rankings showed that during the past year the 1,819 CUs of more than $50 million in assets grew some 14.5%.

Among the findings released by Callahan's:

* Money market shares rose 36.5% over midyear 2001 levels while regular shares increased 21.1% in the same period. "Converting these short-term funds into long-term relationships is the focus of many credit unions right now," said Callahan Executive Vice President, Jay Johnson.

* Loans grew 9.7% over the past year in credit unions with over $50 million in assets, according to the new report. Second quarter loan growth was 3.1%, up from the 1.0% rate during the first quarter with real estate lending showing the strongest gains. The 16.2% growth in real estate secured loans was led by first mortgages which were up 18.6%. Used auto loans were the second highest loan growth category, rising 13.1% over the past 12 months.

* Real estate now comprises 45.4% of the loans in credit unions with more than $50 million in assets, while auto loans are the second largest category with 36.9% of the loan portfolio, the report shows.

In the Callahan Return to Member rankings, Suncoast Schools in Tampa, Fla., Westby Co-op in Westby, Wis., and North Star Community in Cherokee, Iowa had the best ROM scores among credit unions in their asset classes. Suncoast Schools scored 93.85, the top for credit unions with more than $250 million in assets; Westby Co-op scored 97.31 for those between $100 and $150 million; and North Star Community scored 96.5 for those between $50 and $100 million. Callahan's said the average credit union scores about 50.

Meanwhile, on this page are featured credit unions that have been identified by Callahan's as leaders in its Return to the Member rankings.

According to Callahan's, Return to the Member is designed to help a credit union analyze its member service levels based on the information reported in 5300 Call Reports.

Callahan's describes it as an "economic profile based on the value of your credit union's products and services.

"This includes a computation of member service levels, stressing the importance of striving for full member usage of a credit union's products."

The core components of Return to the Member are three functions: lending, savings, and member usage.

The first component is called Return to the Savers, which measures how well a credit union is doing in providing deposit services back to members.

The second component is called Return to the Borrowers, which takes into consideration that credit unions were created to provide credit to members at a reasonable cost. And the final component is member service usage, which measures how efficiently a credit union provides and promotes services to its members.

Callahan & Associates noted that the leaders in the latter category are credit unions with a high number of core account relationships with their members.

A value between one and 100 is assigned to each credit union depending on the performance in the three core areas of Return of the Member.

For readers interested in more information from Callahan & Associates, contact the firm at (800) 446-7453. Readers can contact The Journal via www.cujournal.com, or by calling 888-832-2929.