2013Q3 – CU Data Visualization Extravaganza! Branches

The nature of FI branches is a hot topic right now. Many are discussing the demise of branches, the reemergence of the same, and the plethora of technology that should go into the modern branch. Oh, and the talent and process to support customers. That is why this post considers the status of credit union branches.


A little on histograms will go a long way in reviewing the dashboard below. Histograms show the distribution of a population over a given metric. We’d like to thank SNL Financial for the data.

Number of Credit Union Maintained Branches (for institutions having less than 20 branches)

04 - Number of CU Maintained Branches (20 branches) - Histogram Dashboard

Build a branch? Move a branch? Maintain a branch? Kill a branch? These questions are floating around the industry these days. Some of our peers absolutely believe that branches should go away with the investment directed towards other channels. Check this blog post out by our friends over at Optirate. It raises some very interesting questions based on sound research.

The graphic above demonstrates that the overwhelming majority of credit unions have very few branches. This group, which is represented by credit unions having less than 20 branches, comprises the vast majority of credit unions. The questions are tough ones for this group. There likely needs to be some optimization work done once you get to the 10-branch threshold. Below that, there may be branches that just need to be shuttered. They’re not carrying their weight. No studying, no analysis. Shutter.

Will branches go to zero? I don’t think so. Not in my lifetime and perhaps not in my daughter’s. I think an environment with zero branches likely drives the entire industry towards a much smaller number of institutions. Technology is a commodity. In our way of thinking, more so than brick-and-mortar channels. The guidance: Be careful what you ask for because ultimately it all leads to a very limited group of players, an oligopoly of sorts.

Number of Credit Union Maintained Branches (for institutions having 20 or more branches)

05 - Top CUs - by Asset Size (# of branches greater than 20) - Histogram Dashboard


The group above – those credit unions with 20 or greater branches – is a small group. Some might say it is an elite group. The burden of optimization is the greatest at this level. Systems and talent are more complex, more dynamic at this stage. However, there must be the added burden of looking at acquisition along with optimization should the individual credit union’s culture and focus permit it.

There are 107 credit unions in this group. The size of the circle represents the number of branches as compared to the others. The color gradient represents asset size. This group, though larger, still lacks elements of scale if you look at the group without considering other dynamics (e.g., market size, membership diversity and size, merger history, etc.).

We hope these dashboards have raised some questions and perhaps answered some questions. If you need to dash, and don’t have your own board on which to make it to shore, then do give us a call. Custom reconnaissance, analysis, and direction are just a click away.

No. Really. Just click here.

We thank you for your patronage. Happy holidays!

2013Q3 – CU Data Visualization Extravaganza! ROAA

Okay. Perhaps extravaganza is more hype than this deserves. We believe that Reconn Consulting must bring sound data reconnaissance and analysis, topped off by direction, to the industry. This post will give you (1) a sense of where you fit in against peers, which is an okay reason in our book to continue reading and (2) a sense of what, why, and when you should do something about your current position, which is a reason to be in leadership in the industry.

This post considers ROAA.


A little on histograms will go a long way in considering four out of the five dashboards discussed herein. Histograms show the distribution of a population over a given metric. The classic use of histograms, which many of us would prefer to forget, is the showcasing of test scores. Yeah, that’s what we thought.

In our reconnaissance and analysis, we’ve used data from SNL Financial to show the distribution of the number of institutions as well as the percentage of total that each “bin” of the distribution represents. This is akin to the concept of percentiles. Are you still with us? Good. Further, in most instances we have taken out the extremes to simplify the reporting. In each of the presentations, we shall provide the data visualization first so that you can interpret without our sublime yet subtle dissection. You knew that was coming, didn’t you?

ROAA (%)

01 - ROAA - Histogram Dashboard

Let’s talk about the good and then the bad. Overall, over 75.6% (100% – 24.4%) of credit unions are making money. The bad: the rest are not. Pick your poison – the economy, lack of scale, location, sponsor group woes, planning and execution trials, the dreaded assessment, and the list goes on. It’s time to face facts, however. With our nonprofit clients, there is a saying in the world of board development – give, get, or get out. It’s harsh. But, it’s spot on with what needs to be done in that particular space with existing and new board members. In the credit union space, we submit it is merge, grow (geometrically), or fold.

If we can help with how you look at your data, please contact us. And by all means, if you need help with what to do after you have looked at the data, then please give us a call today or drop us a line by clicking here. Ask for Beth. She likes to chat, certainly, but she loves to listen.

More on concentration risk…this time by peer group

As promised in our last blog post on concentration risk, today we will provide a look by peer group. Our hypotheses were as follows:

  1. Larger credit unions would have a lower percentage of first mortgage real estate loans and smaller ones would have a higher concentration of mortgage loans. We were off on this one!
  2. Credit card concentrations would grow, but not necessarily reaching levels of concern, as asset size grew. We were somewhat in the right here. Concentrations did grow, but not to inordinately high levels. The prior unloading of credit cards has had its impact.

We will continue to keep our eye on concentration risk as the July 2013 data makes its way to the marketplace. Perhaps a look at concentration risk at the credit union level. Yes, that seems appealing. As always, let us know your thoughts. Here are the two dashboards for your consideration.

CU Concentration Risk - First Mortgages - by peer group and state CU Concentration Risk - Credit Cards - by peer group and state


All data provided by SNL Financial. Data visualization courtesy of Tableau Software. Click images to enlarge.

The states of concentration risk

The concentration of risk.  Essentially, nobody likes it and everyone wants to get rid of it.  Regulators frown on it.  Well, we’ve taken a look at it by state and by a couple of products to see what it looks like across the United States.  This graphic is for credit unions.  There are some similarities between the two portfolios, but it is clear that the concentration of credit cards within the aggregate portfolio is quite small.  As we all know, credit unions spent a great deal of time selling off portfolios some years ago.  Pricing has a been low-priority issue for regulators when it comes to credit cards.  Pricing tends to fluctuate as market rates fluctuate, thereby keeping institutions insulated from interest rate risk.  First mortgages, however, have been a growing concern for regulators.  On our next blog entry, we’ll take a look at concentration risk by asset size.


Concentration Risk by State

All data provided by SNL Financial.  Data visualization courtesy of Tableau Software.  Click here to enlarge.