For Credit Unions, branches represent an important channel to engage with the members. However, it is also one of the most expensive channel with high capital and operational costs. The location, utilities, staff and other expenses add up very quickly.

Here we are looking at the Net Income per Branch. Given that we do not have a breakdown of the income that is generated per branch from Call 5300 report, we are simply using the overall net income for a credit union and dividing it by the number of branches. It does not include the true net income for a branch especially when other channels such as call center, digital, etc. are playing an important role in generating new business and servicing existing members.

However, still the net income per branch for Credit Unions provides some interesting insights. Here we are looking at credit unions with assets greater than $500M. For these credit unions, the net income per branch ranges from  $1000 to $6M. It varies based on various factors including the asset size, number of members, number of branches, etc. of the credit unions.

Here are the Top 50 Credit Unions ( with more than $500M asset range) with the lowest Net Income Per Branch for the 2019-Q4.

Lower or negative net income per branch indicates that the Credit Union has been incurring more expenses than its total income, which is not a favorable situation. It will indicate the need to improve either income or expenses or both. There can be multiple reasons for this and we would love to hear your thoughts on some of the most frequent reasons.

Here are the Top 50 Credit Unions ( with more than $500M asset range) with the highest Net Income Per Branch for the 2019-Q4.

The higher the net income, the more the profits, which means that the organization can now invest these funds further, or utilize them in activities which are crucial for growth and sustainability. 

Credit Unions should however view the net income or profit margins in light of the distinct strategy which has been employed by them. Some Credit Unions might employ the profits in facilities for members like low rates of lending, no fees, a high rate of deposits, in which case, the net profits might be lower. 

CONCLUSION

As you compare the profit margin or net income of different branches, it is important to take into account the asset size, factors like loans and deposits per employee, operational expenses per employee, etc, as they have an impact on the total expense and will vary under different circumstances.