Introduction to Simplicity Credit Union
First chartered in 1949, Simplicity Credit Union is one of 116 credit unions that are based in the state of Wisconsin and also one of the largest credit unions in the country. Credit unions operating in Wisconsin have a total of $58 billion of assets and 3.6 million members. Overall, the state is the 10th most popular state in the country for credit unions. Unlike banks, credit unions like Simplicity Credit Union are not insured by the Federal Deposit Insurance Corporation (FDIC) but instead receive deposit insurance from the National Credit Union Administration (NCUA), which operates in a similar fashion to the FDIC. The company has a total of 7 branches and employs a total of 104 employees.
Discussion of the Credit Union’s Operations
The credit union currently has total assets of $411 million, total deposits of $362 million and net loans outstanding of $253 million. On average its members had a total of $13,457 deposited with the credit union – this is a helpful metric to monitor as it provides us with an idea of the level of engagement of the credit union’s membership base. The average credit union in Simplicity Credit Union’s peer set has a loan to deposit ratio of approximately 63%. In comparison, Simplicity Credit Union has a loan to deposit ratio of 70% which is clearly higher than the peer set. A lower ratio is generally better as it indicates that the lending activities of a credit union are more comfortably covered by its deposit base. Deposits are often the most cost effective source of funding for banks and credit unions. Lastly, Simplicity Credit Union’s loan portfolio mainly consists of mortgages and lines of credit and auto loans which represent 52% and 29% of its loan book and had outstanding balances of $132 million and $74 million, respectively.
Contact and Other Helpful Information
- Main Office Address: 222 E Upham St, Marshfield, WI 54449-1543
- Website: http://www.simplicity.coop
- Phone: (715) 387-3702
- Charter Number: 66678
- Charter Year: 1949
- Employees: 104
- Routing Number: 275979364
- Membership: Simplicity Credit Union has a membership base of 26,915 which is smaller than the average credit union operating in the state of Wisconsin. The average credit union in the state has 30,757 members. Over the past three years, the credit union’s total base of members has increased by 15%.
Simplicity Credit Union: Financial Overview
The above chart summarizes the trends in key balance sheet items for Simplicity Credit Union. First off, it is noteworthy that across the board, all four items have increased over the past year. The credit union’s assets have expanded by 27.7% while its total loans have grown by 20.5%. In addition, the company’s mortgages and lines of credit have grown by 30.8% while its deposits have increased by 33.5%. The net worth of a credit union provides us with an idea of how the credit union has performed over the years. It is the total value that the credit union has created for its members since inception. Simplicity Credit Union has a total net worth of $39 million. This implies that the credit union has a net worth per member of $1,444 which is below the national average of $1,606.
Overview of the Credit Union’s Performance Metrics
The above chart shows some of the important metrics we look at when assessing a credit union, and compares these to the average credit union of comparable size. It also shows how these metrics have fared over the past year. Beginning with Simplicity Credit Union’s return on assets (aka ROA), on this statistic the credit union performs approximately inline with the average comparable credit union. When we look at the year over year trends, we can see that ROA has been relatively stable given the 0.03% change. A credit union’s ROA is a good way of assessing how well the entity is using its assets to generate returns. The delinquency rate is a measure of what percentage of an entity’s loan book has fallen past due i.e. is delinquent. All else equal, a higher rate implies a worse performing loan portfolio. In the case of Simplicity Credit Union its delinquency rate is below its peers and over the past 12 months the credit union’s delinquency rate has improved substantially. Finally, the net worth ratio for the credit union is 9.5% which is below its peer group average of 9.7%. This metric has declined on a year over year basis and stood at 10.3% a year ago. Based on the NCUA guidelines, the credit union is considered to be well capitalized.
Ultimately, after considering all of the relevant factors we rate Simplicity Credit Union 3.0 out of 5.0, which is above average. As a final note, please remember that our rating is the product of a proprietary scoring methodology which uses nationwide data for credit unions and our survey work. Importantly, none of the work presented herein is intended to be investment advice or advice of any sort and is presented purely for informational purposes.