NEW YORK—For the third year in a row, Idaho Central Credit Union has been named as the best-performing credit union by SNL Financial, which has just released its list of the 50 best-performing credit unions of more than $500 million in assets in the U.S.
Also rated highly were Schlumberger Employees CU and First Florida CU, which finished second and third, respectively, in SNL Financial’s CU ratings.
To arrive at its rankings, SNL Financial says its uses five core financial performance metrics: member growth, net charge-offs as a percentage of average loans, efficiency ratio, asset quality and market growth. Only credit unions of more than $500 million in total assets and a net worth ratio of at least 7.0% as of Dec. 31, 2014 were considered, a pool of 458 CUs.
SNL said that for each CU it calculated that credit union's standard deviation from the mean for each of the ranking metrics. “The standard deviations from the mean for each metric for each institution were then equally weighted and added together to calculate a performance score for each credit union,” the company said. “To help normalize the data and mitigate the impact of outliers, caps and floors were applied for each metric.”
SNL Financial said that Chubbuck, Idaho-based Idaho Central snagged the top spot with a score of roughly 1.35, 14 basis points below its 1.49 score in last year's rankings.
A seven percentage point year-over-year increase in Idaho Central's efficiency ratio was the major factor behind the credit union's lower score this year as salary and benefit expenses grew faster than assets, according to SNL. Idaho Central's salary and benefits rose to $32.99 million in 2014 from $26.42 million a year earlier, whereas average assets rose to $1.68 billion from $1.40 billion over the same time period. At the end of 2014, Idaho Central reported 499 full-time employees, an increase from the 429 reported a year earlier. Since 2010, Idaho Central has more than doubled in size.
SNL Financial said Idaho Central continued to have great success in both member growth and market growth. In 2014, Idaho Central had 183,489 members representing an increase of over 20% in members from the previous year. The CU also had market growth of 19.15% in 2014.
First Florida Credit Union debuted in the rankings at the No. 3 spot, after having not been ranked last year, according to SNL Financial. The institution received the highest possible values in three of the five categories: member growth, efficiency ratio and market growth.
First Florida managed to trim its net charge-offs-to-average loan ratio by 22 basis points year over year, the fifth straight year of improvement. The credit union enjoyed the dual-pronged benefits of both reduced net loan charge-offs and an increase in average loans in 2014.
First Florida also improved its profitability, achieving an ROAA of 2.82% in 2014, up significantly from the 0.75% reported in 2013. The increased ROAA came at a time when the company also increased its total assets by nearly 73% year over year, SNL Financial said.
The company further reported that of the credit unions that were featured in last year's ranking as well, Evansville Teachers FCU, showed the most improvement, climbing to the No. 29 spot from No.43 in SNL's 2013 ranking.
Of the credit unions which were featured on both years' rankings, SNL Financial said Pentagon FCU and Chevron FCU saw the steepest declines, slipping 42 and 35 spots from their previous rankings. Chevron held the No. 2 spot in the 2013 rankings and fell to No. 37 in 2014. Chevron saw its efficiency ratio rise by over seven percentage points - contributing to its fall in the rankings, respectively.
All told, there were 24 credit unions that appeared in the 2014 rankings that were not in the 2013 rankings, according to SNL Financial. When looking at all of the CUs in the 2013 rankings, there were three CUs that were ranked in the top 10 in 2013 that did not appear on the 2014 list: Advantis CU, General Electric CU, and Goldenwest FCU.