Amidst an industry landscape that is undergoing massive changes as a direct result of the COVID-19 pandemic, credit unions found a multitude of ways to adapt to the evolving needs of their members. Using data obtained from credit unions during the first quarter of 2021, Callahan found an industry that, although well-capitalized to take on this current moment, is eager to discover new ways to generate the capital necessary for continued growth.
A record surge of deposits and borrowing indicate that members view credit unions with the same trust that was present before the pandemic hit. This is further indicated by the fact that 60% of members currently have a checking account with their credit union.
While we’re still waiting for the official NCUA data release, Callahan & Associates discussed key trends and takeaways during our 1Q21 Trendwatch webinar.
Through our Early Data Program, we have access to 99% of the industry’s data weeks before the NCUA’s release. Our analysts parsed 1Q21 data from the industry’s 5300 Call Reports to spot further trends and changes, including:
- Credit union members are taking advantage of historically low interest rates to buy and refinance homes, cars, and credit card balances as the amount of loans originated surged over 30% from the first quarter of 2020, topping $181 billion in the first three months of 2021.
- 5 million consumers and small businesses received a loan from a credit union in the first quarter of 2021 – one million more than in the first quarter of 2020.
- The average credit union member relationship, comprising savings and loan balances, reached a record high of $21,859.
- Credit unions remained financially strong, with earnings reaching levels not seen in nearly 20 years. Although return on assets reached 1.03%, the surge in member deposits resulted in the industry’s net worth ratio falling to 10.0% but continuing to reflect its financial strength.
Members adding so much to their core deposit accounts creates valuable additional liquidity for the movement and is a healthy indicator of financial wellness for those members themselves.
The webinar also featured a presentation from Josh Garrison, VP, Consumer Lending & Card and Kipp Riesland, Senior Program Manager, Financial Wellbeing of Patelco Credit Union ($8.7B, Dublin, CA) about the cooperative’s ScoreUp Credit Builder program. Read more about the program in A Strategy To Help Credit Unions Soar on CreditUnions.com.
A recording of the May 12 Trendwatch can be viewed here.
See Credit Union Data In Action With Peer-to-Peer
Every quarter, Callahan relies on our data and analytics tool, Peer-to-Peer, to analyze credit union performance data weeks before the official release from the NCUA.
Callahan clients can access Peer-to-Peer themselves via their client portal.
Not a client? Click here to request a custom data scorecard, unique to your credit union, and see what Peer can do for you.
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