Whenever we talk with a potential new client, we head over to NCUA.gov and check out their numbers. It’s all public data, and not all that detailed, but after perusing a few hundred of these, we’ve learned how to gain some insights into a credit union’s situation and “attitude” just from poring over ratios and making a few calculations. (Most of these numbers can be found in the FPRs.)
Sure, numbers are boring to most marketers. But sometimes you run across numbers that make you go “hmmmm…?”
Super-low loan delinquency ratio
Many CUs are proud of their extremely low loan delinquency ratios, and then go on to wonder why loan growth is a tad sluggish. Well, duh — you’re rejecting way too many people. Risk management is all boring operational stuff, right? Not really — if your CU has a reputation as a tough place to get a loan, lots of qualified people will never bother to apply.
Assets per member
This one’s always interesting — we’ve seen thriving CUs with assets/member under $4,000 and over $16,000, so there’s no one best number. But it’s a quick way to start understanding a CU’s brand, service philosophy, and audience. We try to find out where the number comes from (member education/income levels? multiple vs. exclusive financial institution relationships?).
Members per employee and members per branch are also similarly useful ratios to ponder — is the CU close to and very personally involved with its members, or are services more remote? How does this change the marketing approach?
Salary & Benefits per Full-Time Employee
Of course, there are regional cost of living differences, but numbers drastically below or above the peer average make you wonder about the cause. Is the CU underpaying staff, or perhaps trying to do too much with too few people? (How many of you are looking up your CU right now? It’s the last line under “Productivity” on the FPR Ratio Analysis Report.)
Over the years, I’ve seen several cases where a CU stopped or drastically slowed marketing for whatever reason (sometimes too much success, sometimes too little). And in every case, loan, asset, and member growth immediately flatlined, then began an accelerating decline. Granted, the economy has been really goofy for a few years, but when growth fell off a cliff a few quarters back you have to go “hmmm?” and figure out why. And then figure out why on earth someone thought it would be a good idea to go underground and stop investing in marketing.
Yield on Average Loans
Well below peer averages? The CU may be chronically underpricing loans to try to attract loans via cutthroat rates. There are lots of things members care about more than rates. The right message to the right people can get a lot more loans in the door than some number.