Trends Report: Credit unions see historic highs, lows

In its June 2022 Credit Union Trends Report based on data from April, CUNA Mutual Group reported that credit union yield-on-asset ratios fall to historic lows in first quarter of 2022.

Credit union yield on asset ratios fell to 2.9% in the first quarter of 2022, the lowest in credit union history and significantly below the 4.6% long-run average, according to the report.

During the first four months of 2022, loan balances rose “a remarkable” 5.6%, the fastest pace in more than 30 years and double the second fastest pace of 2.8% reported in 2000. Every real estate and consumer loan category reported positive loan growth, the report states.

Credit unions held 12% of the total household savings in April, the highest in credit union history and up from 11.6% one year ago, 9.2% 20 years ago and 4.3% 40 years ago.

The report also found that:

  • credit union credit card loan balances rose 0.7% in April, a big turnaround compared to the 1% drop reported in April 2021;
  • credit union new-auto loan balances rose 2.1% in April, a big increase compared to the 0.3% gain reported in April 2021;
  • vehicle sales rose in April to a 14.5 million seasonally-adjusted annualized sales rate — up 8.1% from March, but down 22% below the pace set in April 2021;
  • credit union fixed-rate first mortgage loan balances rose 2% in April, above the 0.8% increase reported in April 2021;
  • average capital-to-asset ratio fell to 9.2% in March 2022, down from 9.8% in March 2021; and
  • the credit union loan delinquency rate (loans two or more months delinquent as a percent of total loans outstanding) fell to 0.4% in March 2022, down from 0.5% in December 2021, and down from 0.5% in March 2021.

The report also stated that it is estimated that as of April 2022, there were 5,083 credit unions in operation, six fewer than in March. “Expect the pace of credit union consolidation to accelerate in 2022 and 2023, due to some credit union managers focusing on possible merger opportunities as the COVID-19 pandemic and its related issues recedes,” the report states. “We expect the number of credit unions to decline by 225 in 2022, the fastest pace since 2015.”

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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