The effect of common bond on credit union performance: The case of black-controlled credit unions
This article compares the financial characteristics of black-controlled credit unions by type of common bond. The study found that many of the operational differences of these credit unions can be attributed to institutional characteristics associated with the three distinct types of credit unions. It also found that black credit unions are viable financial institutions, regardless of type of common bond. This finding is linked to the ownership of credit unions by its membership. This unique relationship has implications for black economic development.
Effects of financial structure and instruments on income of low income credit unions
The effects of loan to asset ratio, investment to asset ratio, management composition and delinquency rate on income to asset ratio of low income credit unions (LICUs) were evaluated. Specific attention was given to risk income behaviours of LICUs. It was found that loan to asset ratio positively influenced the magnitude of income to asset ratio, while the investment to asset ratio had a negative effect on the income to asset ratio. LICUs that employed managers had higher incomes to asset ratios than those with volunteer managers serving in this capacity. The delinquency rate and income to asset ratio were positively related, but negatively related to delinquency rate squared indicating that when the delinquency rate increased at an increasing rate the income to asset ratio fell. LICUs portrayed three risk behavioural patterns, each associated with size or income of the organization: (1) small LICUs had high risk behaviour, (2) middle income LICUs were risk neutral, and (3) large LICUs accepted higher risks as income increased.
THE START‐UP EXPERIENCE OF MINORITY‐OWNED COMMERCIAL BANKS: A COMPARATIVE ANALYSIS
OVER THE PAST DECADE, the number of minority-owned commercial banks in the United States has expanded from ten to forty-four and their assets have increased more than tenfold, to $673 million. Various aspects of the performance of these banks as well as their potential role in community economic development have been examined by other authors.However, the continually increasing growth in the number of such institutions together with the recent difficulties experienced by several of the newer ones suggest the need for additional analysis. The differences in the portfolio management and operating procedures of the older and newer minority banks reported by Andrew Brimmer [7] and John Boorman [3] indicate that it may be inappropriate to aggregate over all minority-owned banks when analyzing their performance. As a result, the present study concentrates solely on the experience of the eight minority-owned banks founded between 1963 and 1965 and compares their performance with that of a sample of similarly situated nonminority banks.2 The nonminority banks in the comparative sample were chosen to insure similarity with the maturity, location and general economic environment of the minority-owned banks.3 The sample selection criteria employed to define the comparative sample are: