In its June 2021 Credit Union Trends Report, based on data from April, CUNA Mutual Group reported that credit union yield-on-asset ratios fell to 3.04% in the first quarter of 2021, the lowest in credit union history.

Home prices surged 2.1% month over month and a “remarkable” 13% over the past year, according to the report. In addition, new auto loan balances fell 4.3% year to date, greater than the 2.3% drop reported during the first four months of 2020.

The report also found that:

• credit union loan balances rose 0.6% in April, double the 0.3% pace reported in April 2020 and 5% during the past 12 months;
• credit union credit card loan balances fell 1% in April, but not as bad as the 4% drop reported in April 2020 when the effects of COVID-19 economic lock down were in full force;
• credit union new-auto loan balances fell 0.2% in April, a smaller decline than the 0.6 drop reported in April 2020;
• vehicle sales rose in April to an 18.5 million seasonally-adjusted annualized sales rate – up 3.1% from March, and 112% above the pace set in the pandemic-ravaged April 2020;
• credit union fixed-rate first mortgage loan balances rose 0.9% in April, above the 1.4% increase reported in April 2020, due to very low mortgage interest rates;
• fixed-rate first mortgages now make up 78% of all credit union first mortgage loan balances, up from 75% last April and the highest in credit union history;
• credit union surplus funds as a percent of assets rose to 36.4% in April from 29.2% last year, as credit unions placed strong deposit growth into investments as loan growth remained tepid;
• during the past year, credit unions added $57 billion in loans to their balance sheets and $233 billion in investments, roughly four dollars in new investments for every one dollar in new loans;
• credit union savings balances rose a strong 1.7% in April, but lower than the 4.6% surge reported in April 2020 (the surge last year was caused in part by the first round of stimulus checks);
• credit union return-on-asset ratios averaged 1.04% in the first quarter of 2021, almost double the 0.53% reported in the first quarter of 2020, due to falling provision for loan losses, lower operating expense ratios from surging assets, lower funding cost and rising noninterest income;
• as of April 2021, CUNA estimates 5,256 credit unions were in operation, three fewer than in March; and
• during the first four months of 2021, approximately 61 credit unions ceased to exist because of mergers, purchase and assumptions or liquidation.

The Credit Union Trends Report is a monthly “pulse check” on the state of the credit union marketplace, often placed in a historical context. The report includes data from two months prior and is published and distributed by Steven Rick, chief economist for CUNA Mutual Group. The Trends Report is intended to provide a review and analysis of recent credit union financial performance and operational results in the context of recent economic activity. Data and analysis are provided to establish standards against which credit unions’ own performance can be compared.