This suggests that increasing competition mostly affects the performance of small institutions. We focus on small banks and credit unions because they are comparable in size and business line. The weak performance of credit unions, observed in their equity and return on assets, is also evident in their assets deteriorating ability to generate profit. Starting in the mid- 1990s, small banks have continuously generated more operating profit per dollar of assets than have credit unions. The difference is less than half a penny on each dollar, but the trend is persistent.
Credit unions lend more aggressively than small banks.
The percent of delinquent loans in banks total loan portfolio improved significantly over the last decade. On net charge-offs, both industries achieved a small but significant improvement. In every region except the Midwest, credit unions surpass small banks in total asset size. Credit unions also are distributed more uniformly across the regions. In all regions, credit unions hold a larger share of their assets in loans than do small banks.