Q3 Profile Report: Delta variant dashes hopes of quick return to normalcy

The New York Credit Union Association, in conjunction with CUNA, has released the Third Quarter 2021 New York Credit Union Profile report. The report provides relevant and up-to-date analysis of key statistics and trends that impact credit union performance.

The report states that surging COVID-19 cases in the third quarter as the delta variant raged dashed hopes of a quick return to normalcy, and economic activity slowed substantially. And although the employment picture brightened, quarter-end job openings exceeded the number of individuals looking for work by the widest margin in history.

Further, supply chain disruptions remained pervasive reflected in a historically low inventory-to-sales ratio, which fueled inflation pressures.

Credit unions remained in generally good financial shape at the end of the third quarter and nearly all should have the resources to continue to serve in meaningful ways as millions of members struggle to make it through the continuing pandemic and related personal financial challenges, the report also stated.

Other highlights from the report include:

  • GDP grew at a 2.1% annualized rate, down markedly from the second quarter’s 6.6% advance;
  • the U.S. unemployment rate finished September at 4.8%, lower than the 5.9% reading reported at the start of the quarter;
  • New York’s unemployment rate remained higher than the U.S. norm in September, reflected in a 7.1% reading at the end of the third quarter;
  • the Federal Reserve federal funds effective rate was essentially unchanged during the quarter;
  • the 10-year Treasury yield held steady, increasing by only 6-basis points;
  • total home sales (new and existing) increased by 3.7% in the third quarter with seasonally adjusted average annualized sales of 6.1 million units in the period;
  • prices on purchase money mortgages in New York increased by 3.1% in the third quarter and they were up 16.6% in the year ending September 2021;
  • the delta variant surge had little effect on credit union financial results, which continued to reflect very strong earnings, solid membership gains, fast loan growth and relatively slow savings growth during the third quarter;
  • credit union asset quality stands at record high levels (i.e., both loan delinquency and net charge-off rates are at historic lows);
  • the growth rate in credit union loans outpaced the growth rate in savings balances for the second consecutive quarter;
  • memberships increased 1.2% (4.8% annualized) in the three months ending September, nearly 14 times faster than U.S. population growth;
  • credit union loan balances increased 5.5% over the past year but grew by 2.5% in the third quarter (a 10% annualized pace).
  • credit card balances continued to rebound in the third quarter, posting a 2.3% increase; and
  • credit union earnings softened but remained very high. Industry-wide ROA equaled 1.09% of average assets in the third quarter; a bit lower than the 1.16% result experienced in the second quarter.

The report (log-in required) was emailed to the main contacts at Association member credit unions on Wednesday. For assistance with accessing the reports, contact the Association’s member relations team at member.relations@nycua.org or (800) 342-9835, ext. 8546.

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