Trends Report: Credit union asset size up ‘remarkable’ 22% from one year ago

In its August 2021 Credit Union Trends Report, based on data from June, CUNA Mutual Group reported that the average asset size of a credit union now stands at $381.2 million, up a “remarkable” 22% from a year ago. The median asset size is $46.5 million, up 24% over the past year, indicating the loss of smaller credit unions, the report also stated.

Credit union loan balances also grew at a 5.9% seasonally adjusted, annualized growth rate in June, significantly better than the 4.9% pace set in June 2020 during the worst of the economic crisis, according to the report. Further, the improving labor market is a major factor pushing the credit union loan delinquency rate to the lowest level in more than 25 years — the delinquency rate was 0.44% in June, significantly lower than the 0.75% considered the natural delinquency rate, the report stated.

The report also found that:

  • credit union loan growth is on the upswing as the economy reopens and vaccination rates improve — credit union loan balances rose 1% in June, faster than the 0.7% pace reported in June 2020, due to every loan category reporting positive growth except new auto loans (-1.1%) and business loans (-2.4%);
  • credit card growth finally turned positive in June, rising at a 2.2% seasonally-adjusted annualized growth rate, the first positive reading since October 2019;
  • credit union new-auto loan balances fell at a 3.3% seasonally-adjusted, annualized growth rate in June, the 24th consecutive monthly decline;
  • used-auto loan balances rose 1.2% in June, below the 1.5% pace reported in June 2020;
  • credit union fixed-rate first mortgage loan balances grew 1.8% in June, faster than the 1.3% reported in June 2020;
  • credit unions now hold $548 billion of first mortgages on their books, which are 4.8% of the entire mortgage market, up from 4.5% in June 2020;
  • credit unions’ liquidity is beginning to tighten as deposit growth slows — surplus funds as a percent of assets fell to 34.9% in June (see figure below), down from the high-water mark of 36.5% set back in April;
  • savings balances rose 15.1% during the past year; and
  • yield curves flattened over the past three months, which will put downward pressure on net interest margins.

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.

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