Q1 2022 Profile Report: Despite economy, CUs continue to serve in meaningful ways

The New York Credit Union Association, in conjunction with CUNA, has released the First Quarter 2022 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.

Continued rapid transmission of the COVID omicron variant combined with Russia’s invasion of Ukraine battered supply chains and disrupted important segments of the labor market in the first quarter of 2022, according to the report.

Inflation, measured by the CPI, accelerated during the quarter from a 0.6% increase in January to 0.8% in February and 1.2% in March. Prices rose 8.6% in the year ending in March, the fastest 12-month increase since January 1982.

GDP declined at a 1.6% inflation-adjusted annualized rate in the first quarter, down from the fourth quarter 2021’s 6.9% increase, while the headline unemployment rate fell three-tenths of a percentage point, from the start of the quarter to the end of March. The first quarter-end reading came in 2.4 percentage points lower than the first-quarter 2021 level.

The Federal Reserve increased the federal funds rate target by 0.25% in response to price pressures, while the 10-year Treasury yield jumped 0.80% in the three-month period, the report states.

Further, the report says to expect “more aggressive Fed action (and resulting pressure on credit union net interest margins) if inflation pressures don’t cool soon.”

Other highlights from the report include:

  • New York’s unemployment rate finished the first quarter at 4.6% – at the 4.6% national average rate and eight-tenths of a percentage point lower than the level reported in the state at the beginning of the quarter;
  • the state’s unemployment rate is three and three-tenths of a point lower than its year-ago reading and seven-tenths of a point higher than the pre-pandemic level;
  • new home sales, which accounted for roughly 11% of total sales, were up 10.9% compared to fourth quarter 2021 levels, but were down 9% compared to the first quarter of 2021;
  • existing home sales were down 2% in the quarter;
  • the FHFA all-transaction home price index rose at a 14.4% annualized rate in the quarter;
  • the price index stood 19.4% higher than its first-quarter 2021 reading and it is 29.8% higher than pre-pandemic readings;
  • credit union financial results continued to reflect strong earnings, solid membership gains, fast loan growth, and relatively slow savings growth during the first quarter; and
  • the growth rate in credit union loans outpaced the growth rate in savings balances for the fourth consecutive quarter, however, credit unions remain flush with liquidity.

The report also states that credit unions started 2022 in generally good financial shape and nearly all should have the resources to continue to serve in meaningful ways as millions of members struggle to make it through personal financial challenges related to high inflation and the potential for a significant economic slowdown.

The report (log-in required) was emailed to the main contacts at Association member credit unions on Monday. 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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