Wisconsin credit unions post strong year
Although the number of Wisconsin credit unions continues to shrink, the industry’s overall membership surpassed the 3 million mark for the first time in 2017 and its earnings continued to grow.
State-chartered credit unions posted net income of $372.4 million last year, or 13.1% more than $329.2 million in 2016, according to the Wisconsin Department of Financial Institutions.
Total loans credit union loans were $27.2 billion, up 11.5% from $24.4 billion.
All of the top 10 largest credit unions in the state posted earnings gains, with eight of them recording double-digit percentage increases over 2016.
Credit unions are like banks in many ways but are cooperatives owned by their members instead of stockholders.
“I think a lot of what we’re seeing in the strong numbers is due to a strengthening economy here in Wisconsin and probably across the country,” said Brett Thompson, president and chief executive officer of the Wisconsin Credit Union League. “But I also think the results reflected by the DFI are kind of indicators of what has been and will continue to be a pretty strong credit union movement here.”
The number of shaky loans on the books of Wisconsin credit unions decreased last year. The delinquent loan ratio dropped to 0.70% from 0.75%.
Jay Risch, DFI secretary, labeled it “a very successful year” for credit unions.
“They continue to adapt to the needs of their members with the right combination of products and services, which in turn is having a positive impact on the Wisconsin economy,” Risch said in a statement.
Wisconsin has 129 state-chartered credit unions. In addition, at least seven federal credit unions have a physical presence in the state.
Although more than a dozen credit unions disappeared via mergers last year, the industry attracted more members overall in Wisconsin.
About a fifth of Wisconsin’s 3 million credit union members were concentrated at the state’s three largest credit
unions — New Berlin’s Landmark, Madison’s Summit and Neenah’s Community First.
Further consolidation is likely to increase the sizes of the largest credit unions, which typically are stronger, have more branches and offer additional services and financial technology to members.
“We still have a good number of very small credit unions in Wisconsin. And as the folks who have been leading those credit unions retire, I think many of those credit unions will find it difficult to find replacements for their leaders,” Thompson said. “That could certainly lead to more them either liquidating or looking for a merger partner.”
Among the state’s 10 largest credit unions, Fox Communities, of Appleton, and Connexus, of Wausau, saw the largest percentage jumps in net income in 2017, at 53.1% and 41.8%, respectively, according to data from the National Credit Union Administration. Fox Communities posted a 24% gain in loan income and 22% increase in investment income over 2016 to help drive the earnings growth. Loan income at Connexus grew 42% from 2016.
Wisconsin now has more than 10 credit unions with at least $1 billion in assets.
Summit and Community First are closing in on joining Landmark in surpassing the $3 billion asset milestone. A bank’s or credit union’s assets consist mostly of its loans.
Only two commercial banks based in Wisconsin — Green Bay’s Associated Bank, with about $30 billion, and Racine’s Johnson Bank, with $4.7 billion — have more than $3 billion in assets. Green Bay’s Nicolet National Bank is on course to become a $3 billion-asset financial institution in 2018.