Rapid deposit growth amid pandemic helped push credit union assets up 17.7% in 2020

Deposits were up 20.3%, loan growth slowed to 4.9% for year

Credit union assets grew 17.7% to a total of $1.84 trillion during 2020 – more than double the rate of growth the prior year –  driven largely by a rapid rise in deposits amid the COVID-19 pandemic, data released Thursday by the federal credit union regulator showed.

The data showed that during the 12-month period ending Dec. 31, 2020, total credit union shares and deposits grew $267.8 billion, or 20.3%, over the year to a total of $1.59 trillion. Loans outstanding grew $55 billion, or 5.9%, to $1.16 trillion.

Source: NCUA

The greatest portion of share/deposit growth in 2020 was for regular shares, which rose $123.5 billion, or 27.8%, to a total of $568.1 billion, the data showed. Insured shares and deposits grew $242 billion, up 19.8% from year-end 2019, to a total of $1.47 trillion.

Credit unions’ net worth rose $12.1 billion, or 6.8%, to a total of $190.3 billion. The aggregate net worth ratio of credit unions (net worth as a percentage of assets) was 10.32% as of Dec. 31, 2020, down from 11.37% at year-end 2019, the data showed.

In other data, the NCUA reported:

  • The delinquency rate at federally insured credit unions was 60 bps in the fourth quarter of 2020, down 10 bps from one year earlier. The net charge-off ratio was 45 bps, down from 56 bps in the fourth quarter of 2019.
  • The loan-to-share ratio stood at 73.2% in the fourth quarter of 2020, down from 84% in the fourth quarter of 2019.
  • The average outstanding loan balance in the fourth quarter was $16,175, up $506, or 3.2%, from one year earlier.
  • Net income totaled $12 billion at an annual rate in 2020, down $2.1 billion, or 14.9%, from the same period a year ago. The NCUA said this decline was due primarily to a jump in provisioning for loan and lease losses or credit-loss expenses.
  • The net interest margin for federally insured credit unions was $48.1 billion in the fourth quarter of 2020, or 2.82% of average assets. That is down from $47.8 billion, or 3.16% of average assets, in the fourth quarter of 2019.
  • The return on average assets for federally insured credit unions was 70 bps in the fourth quarter of 2020, down from 93 bps in the fourth quarter of 2019. The median return on average assets across all federally insured credit unions was 40 bps, down 20 bps from the fourth quarter of 2019.
  • Cash and equivalents (assets with maturity of three months or less) increased $119.2 billion, or 98.3%, to $240.5 billion.
  • Total investments (instruments with maturities in excess of three months) rose $90.7 billion, or 34.5%, to $353.8 billion.
  • Cash and equivalents (assets with maturity of three months or less) increased $119.2 billion, or 98.3%, to $240.5 billion.
  • Total investments (instruments with maturities in excess of three months) rose $90.7 billion, or 34.5%, to $353.8 billion:
      • Investments with maturities less than or equal to one year rose $19.4 billion, or 24.3%, to $99 billion.
      • Investments with maturities of one to three years rose $21.6 billion, or 23.5%, to $113.6 billion.
      • Investments with maturities of three to five years increased $19.4 billion, or 35.5%, to $74.1 billion.
      • Investments with maturities of five to 10 years rose $22.7 billion, or 72.7%, to $53.8 billion.
      • Investments with maturities greater than 10 years increased $7.6 billion, or 135.1%, to $13.2 billion.

The NCUA also said the number of credit unions’ with the agency’s low-income designation rose to 2,642 in the fourth quarter of 2020 from 2,605 one year earlier. The agency said FICUs added 4 million members over the year, with credit union membership totaling 124.3 million in the fourth quarter.

NCUA Quarterly Credit Union Data Summary 2020 Q4

Be the first to comment

Leave a Reply

Your email address will not be published.