ALEXANDRIA, Va.– While the nation’s credit unions overall reported gains in assets and membership during 2021, the numbers again show a bifurcated CU community, with new NCUA data revealing credit unions in every single asset category below $500 million saw declining loan portfolios and fewer members.
Overall, total assets in federally insured credit unions rose by $215.8 billion (11.7%) to $2.06 trillion over the year ending in the fourth quarter of 2021, and insured shares and deposits grew $166.8 billion (11.4%) to $1.63 trillion, and ROA was up from one year earlier, according to new data from NCUA.
The data is included as part of NCUA’s newest Quarterly Data Summary Report.
Among the data highlights, according to NCUA:
- The credit union system’s net worth increased by $21.2 billion, or 11.1%, over the year to $211.6 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.26% in the fourth quarter of 2021, down from 10.32% one year earlier.
- Insured shares and deposits rose $166.8 billion, or 11.4%, over the year ending in the fourth quarter of 2021, to $1.63 trillion.
- The return on average assets for federally insured credit unions was 107 basis points in the fourth quarter of 2021, up from 70 basis points in the fourth quarter of 2020. The median return on average assets across all federally insured credit unions was 50 basis points, up 10 basis points from the fourth quarter of 2020.
- Total loans outstanding increased $92.7 billion, or 8.0%, over the year to $1.26 trillion. The average outstanding loan balance in the fourth quarter of 2021 was $16,109, down $70, or 0.4%, from one year earlier.
- The delinquency rate at federally insured credit unions was 49 basis points in the fourth quarter of 2021, down 11 basis points from one year earlier. The net charge-off ratio was 26 basis points, down from 45 basis points in the fourth quarter of 2020.
- The number of federally insured credit unions declined to 4,942 in the fourth quarter of 2021, from 5,099 in the fourth quarter of 2020. In the fourth quarter of 2021, there were 3,100 federal credit unions and 1,842 federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-running industry consolidation trends.
- Federally insured credit unions added 5.3 million members over the year, and credit union membership in these institutions reached 129.6 million in the fourth quarter of 2021.
The Big Get Bigger
NCUA reported again that consistent with long-running trends, credit unions with assets of at least $1 billion reported the strongest growth in loans, membership, and net worth over the year ending in the fourth quarter of 2021.
The data show the largest credit unions continue to get larger, as the number of federally insured credit unions with assets of at least $1 billion increased to 404 in the fourth quarter of 2021 from 370 in the fourth quarter of 2020. These 404 credit unions held $1.5 trillion in assets, or 74% of total system assets, NCUA said, adding credit unions in the category reported loan growth of 11.6%, membership growth of 9.2% and a net worth increase of 15.4%.
Additional Data Points
- The number of federally insured credit unions with assets of at least $500 million but less than $1 billion rose to 287 in the fourth quarter of 2021 from 279 in the fourth quarter of 2020. These 287 credit unions held $204.6 billion in total assets, or 10% of total system assets. Credit unions in this category reported a 0.4% decline in total loans outstanding over the year. Membership fell 2.2%, while net worth increased 3.3%.
- The number of federally insured credit unions with at least $100 million but less than $500 million in assets increased to 1,082 in the fourth quarter of 2021 from 1,063 in the fourth quarter of 2020. These 1,082 credit unions held $246.0 billion in total assets, or 12% of total system assets. Credit unions in this category reported a 1.3% decline in total loans outstanding. Membership fell 5.3%. Net worth edged up 1.4%.
- The number of federally insured credit unions with at least $50 million but less than $100 million in assets edged down to 683 in the fourth quarter of 2021 from 687 in the fourth quarter of 2020. These 683 credit unions held $49.6 billion in total assets, or 2% of total system assets. Credit unions in this category reported a 3.6% decrease in total loans. Membership fell 6.9%. Net worth declined 1.9%.
- The number of federally insured credit unions with assets of at least $10 million but less than $50 million declined to 1,447 in the fourth quarter of 2021 from 1,541 in the fourth quarter of 2020. These credit unions held $37.6 billion in assets, or 2% of total system assets. Credit unions in this category reported a 9.8% decrease in loans. Membership declined 12.4%. Net worth fell 7.6%.
- The number of federally insured credit unions with less than $10 million in assets declined to 1,039 in the fourth quarter of 2021 from 1,159 in the fourth quarter of 2020. These credit unions held $4.3 billion in assets, or 0.2% of total system assets. Credit unions in this category reported a 15.3% decline in loans, membership was down 16.3% and net worth declined 11.3%.
Statement from Chairman
“Overall, the credit union system performed well in 2021, despite the year’s many challenges,” said Chairman Todd M. Harper. “This is a testament to the strength of the credit union system going into the pandemic and the skillful management of credit union CEOs, boards of directors, and staff over the last two years.
“However, I would caution that we may not yet have seen the COVID-19 pandemic’s full economic effects on credit union portfolios and performance,” Harper continued. “The potential for new COVID variants, continuing labor market and supply chain challenges, inflationary pressures, the prospect of rising interest rates, and current geopolitical tensions could negatively affect household finances and ultimately credit union performance going forward. Credit unions and the NCUA, therefore, must remain watchful and ready to respond to these issues.”