All Credit Union Ratings Updated w/Year-End Data

All Credit Union Ratings Updated w/Year-End Data

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Here’s some good news. Over half of our nation’s credit unions have earned BauerFinancial’s top 5-Star rating; the highest percent since 2020. Total assets, loans and insured shares all increased in 2022.

NCUA Chairman, Todd Harper, first highlighted the industry’s capital levels and strength but then issued this warning, “As rates increase in the current economic environment, so does the associated risk that makes short-term liquidity events possible. The potential for sudden changes in either inflation, the rate environment, or the economy means that credit unions must remain nimble in the months ahead.”

Credit unions, like banks, have a variety of liquidity sources at their disposal should the need arise. For now, things are moving smoothly for our nation’s credit unions.

Net worth increased by $21.4 billion over the year. That’s more than a 10% increase. The industry aggregate capital ratio stood at 10.74% at the end of 2022.

Total assets rose by 5.2% over the calendar year, ending 2022 at $2.17 trillion. Outstanding loans rose by 20% to end the year at $1.51 trillion. At $17,141, the average CU loan is up $1,022 from the end of 2021.

Loan quality did slip a bit, though. The delinquency rate of 61 basis points was up from 53 bps last quarter and 49 bps a year ago.

Credit card delinquencies, in particular, rose by over a half a percent during 2022 – from 96 basis points to 1.48%. Auto loan delinquencies rose as well, up 25 basis points from 42 bps at year-end 2021 to 67 bps at the end of 2022.

Total shares and deposits rose by 3.4% over the year, to $1.85 trillion. Of that, NCUA-insured shares/deposits accounted for $1.68 trillion (roughly 90% of the total).

There are 50 credit unions listed on page 5 of this week's Jumbo Rate News that each reported more than 25½% growth during the 12 months ended December 31, 2022 and each was established prior to 2015 so they are all at least 7 years old.

The industry loan to deposit ratio of 81.4% was up from 70.2% a year ago while the industry capital ratio of 10.74% was up from 10.26% from year-end 2021.

While the number of credit unions is decreasing, membership continues to grow. And credit unions, at least some of them, are adding branches to accommodate those new members. The number of CU members grew 4.4% during 2022. At 135.3 million, credit union membership is 44% higher than it was 10 years ago. Credit unions added a net of 96 new branch offices during 2022.

Looking at credit unions by size is perhaps more meaningful than looking at the industry as a whole. Because, for example, even though total share/deposits rose 3.4% in ’22, credit unions with assets greater than $1 billion are the only size group that actually registered an increase.

The smallest credit unions have the best capital cushions relative to their size. They also have the highest delinquency rates. Fortunately, all of those delinquencies don’t  end up as charge-offs. While their charge-off rate is higher than many other groups, it is on par with the Biggest credit unions.

Credit Union Performance by SizeButton to Download the Current issue of Jumbo Rate News now