This paper was published as a Faculty Working Paper (no. 193) for the Lubin School of Business, Center for Applied Research, December 2002.

Document Type



This study provides a statistical tool for assisting credit union managers in planning capital/asset ratio strategies for optimum operating efficiency. Focus groups, personal interviews, and survey data from more than 165 randomly selected responses form the basis of our model. The survey solicited information concerning the relationship between nine independent variables and expected optimum gross and net capital/asset ratios. The most statistically significant variables were total loan/assets, real estate loans/total loans, unsecured and credit card loans, the operating expense ratio, and the delinquency ratio. Two multiple regression equations were derived from these data. They allow operating managers to enter their specific credit union data into the equations and generate target goals for optimizing their gross and net capital/asset ratios over the next two years.