WASHINGTON–The newest monthly estimates by CUNA for credit unions’ economic performance reflect “no big surprises,” but will reflect one unanticipated bright spot: an improvement in employment, according to Mike Schenk, the trade group’s chief economist.
Schenk said the numbers CUNA will be releasing this week as part of its Monthly Credit Union Estimates will for the first time include the first full month of data “reflecting credit union experiences during the COVID crisis.”
As expected, Schenk said the numbers show very strong savings growth and very week loan growth. Overall, year over year, he said for April member savings were up 14%, while loans grew just 6%. As a result, the loan-to-share ratio slid 6.3 percentage points to 78.1% over the first four months of 2020, which Schenk said is the largest four-month slide in that ratio CUNA has seen in the 30 years it has compiled the data.
Overall, Schenk acknowledged credit unions are feeling pressure across the balance sheet.
A Note on Delinquencies
While the economy has suffered and some 20-million people have been thrown out of work, Schenk said there has only been a “bit” of deterioration in delinquency rates. At the end of April, credit unions overall posted a delinquency rate of .69%.
“What’s important to note on that front is the total dollar amount of delinquencies were up 10% in April, and 23% over April of 2019,” Schenk added.
CU capital at the end of April stood at 10.7%, which he said is “Still strong,” although down from 11.2% at the beginning of this year.
“We are on the margin more upbeat than we were a month ago,” said Schenk. “Generally speaking, the big difference is our expectations for unemployment are a bit rosier than they were a month ago, and by extension that means we believe loan losses will be a bit lower than we originally forecast.”