So just how big is Navy Federal compared to the other credit unions?

Consider this. The more than 1 million new members Navy Federal added during the past year is more than the total membership of all but nine credit unions in the U.S.

The National Credit Union Administration posted call report data recently that showed Navy Federal had more than 13.3 million members at the end of 2023.

By comparison, the next five largest credit unions in the country by assets had roughly 9.6 million members combined at the end of the fourth quarter, according to the NCUA.

Some of the $170.8 billion-asset institution’s fast growth can be attributed to a heavy dose of advertising.

Navy Federal spent $196 million in marketing and promotion in 2023, according to the NCUA data. The next closest credit union in terms of ad spending was Pentagon Federal Credit Union, at about $57 million.

“Navy’s marketing efforts have been very effective in executing their military family strategy to add to membership totals, emphasizing that immediate family members of active or former military personnel are eligible,” said Jim Adkins, managing partner for the consultant Artisan Advisors. “Navy Federal has, and continues to stay true to, a very well defined mission: providing financial services to current and former members of the military and their families.”

In an interview, Mehdi Dinia, vice president of membership at Navy Federal, said the credit union’s growth is fueled by several factors, including word of mouth and the role its members play as advocates. 

Navy Federal serves the Navy, Army, Marine Corps, Air Force, Coast Guard and Space Force and their families.

“We know from our studies that members share the benefits of joining with their friends and family. It’s a testament to the value we provide to our members,” Dinia said.

The credit union’s growth has occurred wherever military and Defense Department personnel are concentrated, with growth especially strong on the East Coast and in Texas and California.

Total U.S. credit union membership increased by 3.4%, to 138.8 million, in the third quarter according to the NCUA. 

But while growth for Navy Federal and the other largest institutions has been strong, smaller institutions have struggled to bring in new members.

Credit unions with at least $1 billion in assets saw 5.6% year-over-year membership growth, but each of the NCUA's asset categories below the largest saw a drop in membership.

Credit unions between $50 million and $100 million in assets saw membership decline 3.5% during the past year. 

One of those, Pinnacle Credit Union in Atlanta, had 6,805 members at the end of 2023, down from 6,844 a year earlier.

The $87 million-asset credit union’s CEO, Matt Selke, said small credit unions need to make new member growth a priority, although keeping net income above break-even often occupies most of their time. 

“It took us 10 years to be in a place to actually focus on growth,” he said.

Dinia said the rapid growth in membership will likely prompt Navy Federal to build more branches.

The credit union’s members, altogether, visited branches more than 22 million times last year — an increase of 770,000, compared with 2022. 

“We know that some of our members want to walk inside one of our branches to speak to our member service representatives face to face,” Dinia siad. “We have 355 branches worldwide and will be adding at least nine more locations this year.”

Navy Federal counted nearly $124 billion in total loans at the end of 2023, compared with $109 billion a year earlier. That’s an increase of almost 14%. 

For the industry at large, total loans outstanding increased $132 billion, or 9%, over the year, to $1.6 trillion.

Adkins said he expects Navy Federal’s growth rate to continue unabated over the next 12 months. Navy Federal’s product offerings are fairly standard, he said. But the combination of its “excellent” execution and strategic marketing will continue to drive growth.

At the same time, smaller institutions will continue to struggle, he said.

“Smaller credit unions are facing the same challenges as small community banks,” Adkins said. “The cost of technology and the pace of digital innovation are proving to be major hurdles for smaller credit unions as they fight to stay relevant.”