A comparison of bank and credit union growth around the financial crisis
ISSN: 1935-5181
Article publication date: 17 March 2020
Issue publication date: 26 May 2020
Abstract
Purpose
The purpose of this research is to examine the growth rates of commercial banks and credit unions around the financial crisis and recovery. Credit unions are analyzed as a group and by field of membership. Specifically, this research analyzes the growth rates of assets, deposits, and loans.
Design/methodology/approach
This research employs univariate tests of differences to examine the median growth rates for commercial banks and credit unions. Unbalanced pool regressions analyze growth rates during the pre-crisis, crisis, and recovery periods, controlling for size, net charge-offs, and unemployment.
Findings
Univariate test results that control for size show that banks grow at faster rates than credit unions for most of the pre-crisis years. However, medium sized credit unions grow at faster rates for most of the crisis and recovery years. Results of unbalanced pool regressions suggest that, overall, credit unions grow at slower rates than do banks. However, during the crisis and recovery, credit union growth is significantly greater than that of banks, after controlling for net charge-offs, size, and unemployment. Credit union growth varies by field of membership type.
Originality/value
Although a large volume of research examines commercial bank performance around the financial crisis, only a few papers assess the performance of credit unions. And very few papers compare commercial banks and credit unions. This paper explores how the recent financial crisis influenced the growth of commercial banks and credit unions from 2005 to 2013.
Keywords
Citation
Lu, W. and Swisher, J. (2020), "A comparison of bank and credit union growth around the financial crisis", American Journal of Business, Vol. 35 No. 1, pp. 25-44. https://doi.org/10.1108/AJB-03-2019-0017
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited