1. Data Trends in Branching Suzanne McGann, Functional Analyst Janet Lee, Industry Analyst Callahan & Associates

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5. Leadership Team Development Executive education to help your credit union's leadership team tackle strategic management challenges. Callahan's Leadership Team Development brings collaborative learning to the credit union leadership ranks. Learn Together Develop a Common Language Hone Skills with Real World Case Studies Learn More: http://www.callahan.com/leadership-team-development/http://www.callahan.com/leadership-team-development/

6. The New BranchAnalyzer Is Here! The new version of BranchAnalyzer is live. Sign in to your client portal at www.Callahan.com/Callahan- leadership to get started. www.Callahan.com/Callahan- leadership Added functionality and data sources will make it easier than ever to analyze and understand: Institutional Performance Branch Trends Local Competition Strategic Growth Opportunities

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8. Data Trends in Branching Suzanne McGann, Functional Analyst Janet Lee, Industry Analyst Callahan & Associates

9. Agenda Differences in Reporting Requirements: Banks vs. Credit Unions Trends in Credit Unions and Banks’ Branching Trends in Deposits and Market Share Let’s Do a Case Study! Dive into our new BranchAnalyzer

10. Differences in Reporting Requirements: Banks vs. Credit Unions

11. How do credit unions and banks report their branch and deposit data? -When: Annually (data as of June; data is available around September) -Where: FDIC’s The Summary of Deposits  The Summary of Deposits (SOD) is an annual survey of branch office deposits for all FDIC-insured institutions. -What: Branch and deposit information, including:  Bank name  Branch name  Branch service type  Branch number  Branch address  Deposits by branch Banks

12. How do credit unions and banks report their branch and deposit data? -When: Quarterly -Where: NCUA’s Credit Union Branch Information -What: Branch information, including:  Credit Union name  Branch name  Branch Type (Branch office/Corporate office)  Main office (Yes/No)  Address and phone number Credit Unions

13. Trends in Credit Unions and Banks’ Branching

14. Future of branches..? The Buffalo News, June 7,2014 Gensler The Financial Brand, February 5, 2014 WSJ, March 31,2013 Business Insider, October 27, 2015

15. Banks* are closing branches… *Banks include both commercial banks and savings institutions

16. The effect of branch closures on local residents and communities Inconvenience and costs Financial exclusion Limited choice in accessing finance Branch Closure

17. Financial institution-free counties There are 22 U.S. counties that have neither banks nor credit unions. StateCountyTotal Population in the County in 2014 AKALEUTIANS EAST 3,360 AKDENALI 1,921 AKHOONAH ANGOON 2,082 AKLAKE AND PENINSULA 1,631 AKWADE HAMPTON 8,010 AKYUKON KOYUKUK 5,547 AKALPINE 1,116 GAECHOLS 4,003 HIKALAWAO 89 MTPETROLEUM 485 NVESMERALDA 822 NVSTOREY 3,912 NDSIOUX 4,422 NDSLOPE 765 SDBUFFALO 2,077 SDMELLETTE 2,100 TXBORDEN 652 TXKENEDY 400 TXKING 262 TXLOVING 86 UTDAGGETT 1,117 WIMENOMINEE 4,522 A total of 22 counties 49,381

18. While the number of CUs is declining, the number of branches remains stable

19. Top 10 states with the highest number of credit union branches RankState Number of CU Branches as of June 2015 CU Deposit Market Share as of June 2015 1 Texas1,6649.4% 2 California1,59810.4% 3 New York1,0604.2% 4 Michigan1,05518.4% 5 Pennsylvania1,0379.3% 6 Florida9969.1% 7 Ohio8117.2% 8 Illinois6685.1% 9 Wisconsin64114.7% 10 North Carolina62510.9%

20. 10 Year CAGR in number of branches CUs Under $20M CUs $20M- $100M CUs $100M- $250M CUs $250M- $500M CUs $500M- $1B CUs Over $1B 10 Year CAGR in # Branches 0.7%2.0%2.7% 4.0%4.8% 10 Year CAGR in Number of CU Branches by Asset Size Data as of June 30 for All Credit Unions that Are Active Today CUs Under $20M CUs $20M- $100M CUs $100M- $250M CUs $250M- $500M CUs $500M- $1B CUs Over $1B 10 Year CAGR in # Branches -6.2%-2.2%0.0%1.7%4.2%9.5% 10 Year CAGR in Number of CU Branches by Asset Size Data as of June 30 for All Credit Unions that Have Existed

21. Number of credit union branches by asset size – for all credit unions that are active today

22. Trends in Deposits and Market Share

23. Share balances close in on $1 trillion as members direct more savings to credit unions Historical Share Balances For all U.S. Credit Unions $100B increase every two years since 2009

24. Credit Union Share Balances as of June 2015 $999,499,756,400

25. Share growth is on the rise with balances up $46.9 billion since June 2014

26. Loan-to-share ratio is rising at credit unions Loan-to-Share Ratio Data as of June 30

27. While change in net liquidity from share growth is still negative, it improved from a year ago Change in Net Liquidity from Share Growth Data as of June 30

28. Since 2007, cost of funds has declined Cost of Funds Data as of June 30

29. Strong core deposit growth fuels growth in total shares

30. The percentage of members with a credit union checking account is on the rise Share Draft Penetration Data as of June 30

31. Regular share is the largest component of credit unions’ share portfolio

32. Core deposits are a becoming a larger part of credit unions’ share portfolio 13.9% 36.4% 22.8% 19.1% 7.7% 9.0% 32.8% 18.7% 28.4% 11.1% Historical Share Composition Data as of June 30

33. Money market deposits make up a half of banks’ share portfolio

34. Credit unions’ share growth lags that of banks

35. Credit union deposit market share has gradually declined since 2010

36. Top 10 states with the highest credit union deposit market share RankState Credit Union Deposit Market Share as of June 2015 YOY Change in Deposit Market Share 1 Alaska29.8%-0.9% 2 District Of Columbia24.6%3.0% 3 Idaho24.0%1.6% 4 Washington22.7%-0.8% 5 New Mexico21.6%0.5% 6 Hawaii21.5%-0.5% 7 Oregon21.4%-0.1% 8 Vermont19.6%-0.8% 9 Michigan18.4%0.7% 10 New Hampshire17.7%-1.0%

37. States that reported over 1ppt increase in credit union deposit market share ID ND MN WI IA 3.2 ppts 3.0 ppts 1.7 ppts 1.6 ppts 1.0 ppt

38. Let’s do a case study!

39. 10 states with the highest # of bank branch closures – opportunities for credit unions? State Number of Bank Closures June 2014 – June 2015 Total Number of Bank Branches as of June 2015 1California3257,100 2Texas3206,730 3Florida3065,388 4Pennsylvania2104,394 5Michigan2092,743 6South Carolina2081,324 7Illinois1954,628 8New York1865,262 9Georgia1482,482 10Ohio1433,839

40. Top 10 counties with the highest # of bank branch closures CountyState Number of Bank Closures June 2014 – June 2015 Total Number of Bank Branches as of June 2015 1CookIL801,518 2Los AngelesCA721,792 3HarrisTX521,002 4DallasTX42646 5MaricopaAZ37845 6TarrantTX34451 7Miami-DadeFL31688 8New YorkNY30693 9OrangeCA30683 10San DiegoCA29608

41. Case Study: Tarrant, TX County with the 6 th highest number of bank branch closures (34) over the past year Total number of banks: 63 Total number of bank branches: 451 Total number of credit unions: 36 Total number of credit union branches: 81 Total deposits: $39.5 million Total population: 1.9 million Unemployment rate: 5.3% Credit union deposit market share: 12.1%

42. How to benchmark your branch footprint using our new BranchAnalyzer AR

43. Attend a Live BranchAnalyzer Training! Sign up here: http://www.callahan.com/branchanalyzer-training/

44. Questions?

45. Tell us what you think! Please take our post-event survey. One lucky survey respondent will win a Starbucks gift card!

46. Thank You! Janet Lee, Industry Analyst Suzanne McGann, Functional Analyst 202-223-3920 jlee@callahan.com smcgann@callahan.com