A Direct Line Blog

By Donya Parrish, MCU VP- Risk Management

There is a lot of discussion in the news about inflation, rising rates, and their economic impact while we are still recovering from the pandemic. What does it mean for your credit union and the planning you are doing?

The mid-year 2022 NCUA data for federally insured credit unions came out last week, and it offers some insight into what credit unions were seeing for the first half of the year. Here are a few key year-over-year changes reported in the NCUA Quarterly U.S. Map Review and the MSIC Custom Performance Report for Montana. [Note that the NCUA report shows year-over-year for most categories and the CPR shows since prior 12/31.]

• Our 46 federally insured credit unions (domiciled in the state) held $7.6 B in assets and serve 427,685 members.
• Asset growth over the previous year was at 7.8%, compared to 4.2% nationally.
• With a .07% increase, our membership rate was a slow area of growth. The same was true nationally with a .04% decline since June 2021.
• Loan growth came in at 5.6% in our state and 7.2% nationally. While Montana ranked 41st in the nation in that area, it had a median total delinquency rate of 24 (bps) compared to 38 for the U.S. Charge-offs were also much lower in our state when compared to regional and national rates.
• Yields on average loans declined in the last two years, and nearly half (49.9%) of our state loan portfolio is in first mortgages. This is markedly higher than the Region 4 total (29.8%) and national total (31.4%).
• Our state loan-to-share ratio was 57%, compared to 58% nationally.
• Net worth/assets are a strong 10.76% for our state. That is higher than the national 8.95% average, but the influx of deposits continues to stress capital levels.
• The NCUA report also noted the change in house prices since the 2007-2009 recession. Montana ranked 5th in the country with a 120.5% change, including a 24.9% year-over-year change in house prices from June 2021 to June 2022.

If you are interested in seeing how your credit union compares, review your own institution’s individualized report. Your CEO has access to it on a quarterly basis as a dues service from your association, and I can provide it to your board upon request.