Credit union loans decreased in February

The dollar amount of credit union loans outstanding decreased -0.06% in February, according to America’s Credit Unions’ latest Monthly Credit Union Estimates, compared to a -0.06% decrease in January and a 0.38% increase in February of 2023. The estimates are based on information from a monthly sample of credit unions and are revised when quarterly regulatory report data is available. 

America’s Credit Unions’ economic team sees this weak overall loan growth continuing, with an expected 4% full-year 2024 increase in loan balances overall.  The long-run average annual growth in credit union loans is much higher – about 8% over the past 30 years.

Home equity/second mortgage loans led loan growth during the month, rising 1.1%, followed by adjustable-rate first mortgages (0.7%) and commercial loans (0.4%). On the decline were new auto loans (-1.2%), credit cards (-1.0%), personal unsecured loans (-0.7%), fixed rate mortgage loans (-0.1%) and used auto loans (-0.03%).

Credit union savings balances increased 1.6% in February, with share drafts leading savings growth during the month at 3.7%, followed by certificates (2.6%) and regular shares (0.9%). On the decline were individual retirement accounts (-0.1%) and money market accounts (-0.3%). 

Asset quality increased in the month with credit unions’ 60-plus day dollar delinquencies declining from 0.87% in January to 0.81% in February. The decline is notable because it occurred in the face of modestly declining total loan balances (i.e., the denominator of the delinquency ratio declined but ratio itself also declined). 

The loan-to-savings ratio decreased from 85.7% in January to 84.3% in February. The liquidity ratio – the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities – increased from 13% in January to 14.2% in February.

Total credit union memberships increased 0.1% in February to 142.1 million. The monthly increase in memberships was 4.7 times higher than the February increase in U.S. population growth, according to estimates from the National Bureau of Economic Research.

 The movement’s overall capital-to-asset ratio decreased to 9.1% in February but remains over two percentage points higher than the threshold level that regulators see as “well capitalized.” The total dollar amount of capital decreased by 0.4% to $209.9 billion. 

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