Steve Rick - Small CUs Beating Big CUs In Key Performance Area

MADISON, Wis.—The current rate environment, for a change, may actually be favoring small CUs, data from TruStage’s latest Trends Report show.

The September Trends Report, which is based on CU performance through July, reveals the credit union return-on-asset ratio fell to 0.66% in the first six months of 2024, on an annualized basis, down from 0.78% in the first six months of 2023.

The 12-basis point decrease in earnings during the last year was driven by a 15-basis point increase in provisions for loan losses as a percent of average assets, and a 7-basis point increase in operating expense ratios, the report states.

Higher Earnings

Partially offsetting the expense increase was a 3-basis point increase in net interest margins and a 6-basis point increase in fee and other income ratios. Credit unions with assets greater than $50 million reported a drop in earnings while smaller credit unions reported higher earnings due to the difference in the increase in their cost of funds ratios.

Steve Rick

“For example, billion-dollar credit unions saw their cost of funds ratios rise from 1.33% during the first half of 2023, to 2.03% in the first half of 2024, a 70-basis point increase. Meanwhile, credit unions with assets less than $20 million saw their cost of funds increase from 0.45% in 2023 to 0.81% in 2024, a 36-basis point increase,” wrote TruStage Chief Economist Steven Rick. “This cost of funds disparity is due to bigger credit unions relying more on higher-cost money market and certificates of deposit accounts for funding. So, for the first time in many years, these smaller credit unions reported a return-on-asset ratio similar to the billion-dollar credit unions.”

Membership Growth

Aside from rates, small shops continued to struggle, particularly with membership growth. Credit union memberships grew 0.1% in July 2024, below the 0.4% reported in July 2023, due to a significant reduction in auto loan originations and slower job growth. On an annual growth rate basis, memberships are up only 1.2% in the year ending in July 2024, below the 4.3% pace set in the year ending in July 2023. ‘

“This 1.2% pace is the slowest since the tail end of the Great Recession in November 2011. The membership growth slowdown was partially driven by the 2.4 million jobs gained during the last year, according to the Bureau of Labor Statistics, which is below the 3.2 million jobs gained in the year ending in July 2023,” Rick wrote.

The slowdown in membership growth in 2024, compared to 2023, was seen across the board. Most credit unions with less than $100 million in assets reported negative membership growth while credit unions with assets greater than $1 billion reported relatively strong membership growth of 3.8% due to organic growth and mergers.

“Credit unions should expect membership growth around 1.5% in 2024, and a slightly better 1.8% membership growth is forecasted for 2025 as loan growth picks up,” Rick said.

Comments

Syracuse Fire Department Credit Union

Remember, you're not alone with NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Blog Job Board

Read Complete Article HERE>»

Happy Holidays To All Who Serve

Happy Holidays To All Who Serve 12/22/2025 10:28 am By Grant Sheehan and Anthony Hernandez Every year, many Americans celebrate the joy of family and relief from work the holidays bring. Apart from the hustle and bustle, the holiday season is a special time to be with loved ones, engaging in family traditions and rituals, and making memories that will last a lifetime. However, not everyone gets to partake in the holiday gatherings. There are over a hundred thousand military members serving in harm’s way or in 24-hour command center...

Read Complete Article HERE>»

Is another housing bubble brewing?

While there have been fears expressed by some of a repeat of the housing bubble that led to the housing crisis just over a decade ago, numerous real estate analysts say they believe the market fundamentals are much stronger now and that the sharp increase in home prices reflects low rates, a lack of inventory, and demographics. To be sure, the market is hot in many markets, with home sellers receiving multiple cash offers, often over the listed price, on homes. Some analysts, including those at Swiss banking giant UBS, have published charts showing how home prices are outstripping both wages and rents, reported USA Today. Home prices have appreciated more than 60% since November 2012, incomes have only appreciated by 20% and rents by 30% over the same time period, the report added. “But unlike the real estate boom that led to the Great Recession, this nationwide price spike is not being fueled by a wholesale collapse in lender ethics,” USA Today reported “There aren't any low-doc o...

Read Complete Article HERE>»

Sunday Reading - The gold standard, explained

Gold Standard The gold standard, explained A gold standard is a system where a country’s currency is pegged to, and can be converted into, a fixed amount of gold. It’s typically meant to create a sense of security in the country’s currency: When a government uses a gold standard , its currency can be exchanged for an equivalent amount of gold—although regulations around redemption vary by country. After the Civil War, in 1873, America adopted the gold standard for the first time. At the time, if gold was priced at $100 an ounce, each dollar rep...

Read Complete Article HERE>»

NAFCU Economist: U.S. Might Dodge Recession

Curt Long said a strong jobs report shows resilience despite the Fed’s escalation in interest rates. By Jim DuPlessis | January 06, 2023 CUTimes Source: Shutterstock. NAFCU Chief Economist Curt Long said Friday the continued strength in the job market has increased the odds the nation will dodge a recession this year. The U.S. Bureau of Labor Statistics reported Friday there were 153.7 million seasonally adjusted jobs in December, an increase of 223,000, or 0.1%, from November and up 3% from a year earlier. The unemployment rate was 3.5% in December, down from 3.6% in November and 3.9% in December 2021. Long said December’s rate was the lowest in more than 50 years, while the labor force participation rate rose slightly. Seasonally adjusted average hourly earnings were $32.82 in December, up 0.3% from November and up 4.6% from a year ago, a slightly lower rate of increase from previous months. Curt Long “This is an unambiguously positiv...

Read Complete Article HERE>»

MBA Lowers Mortgage Outlook Through 2023 - The 30-year fixed-rate exceed the 5% mark at 5.13% — the highest since November 2018.

Existing home purchases are likely to fall this year, but higher prices will cause originations to rise slightly. The Mortgage Bankers Association on Wednesday lowered its forecast for both refinance and purchase originations this year and next as interest rates rise faster than it anticipated and expectations rise for more aggressive actions by the Fed to curb inflation. MBA Chief Economist Mike Fratantoni said mortgage rates have risen by more than 1.5 percentage points since Jan. 1. “This rapid increase in rates, caused by a much more rapid pace of rate hikes and balance sheet reduction from the Federal Reserve, is in response to the booming job market and inflation being at a 40-year high,” Fratantoni said. “The jump in mortgage rates will slow the housing market and further reduce refinance demand the rest of this year.” Also on Wednesday, the MBA reported the fifth consecutive drop in its Weekly Mortgage Applications Survey. The number of applications in the week en...

Read Complete Article HERE>»

Email and Text Message Etiquette

As we navigate our everyday communications, I want to emphasize the importance of practicing good email and text message etiquette. This enhances clarity and ensures that everyone feels respected and valued in our interactions. Email Etiquette: 1. Use a Clear Subject Line: A subject line that accurately reflects the content of your email will help recipients know what to expect. 2. Greet Appropriately: Start with an appropriate greeting, such as "Dear [Name]", "Hello [Name]," or "Hi [Name], which sets a positive tone. 3. Acknowledge Receipt: If you receive an email that requires a response, action, or information, please acknowledge its receipt. A simple reply confirming that you have received the email helps the sender know their message was received and provides an opportunity to clarify expectations. 4. Be Concise: Keep your emails clear and to the point. Avoid excessive details unless necessary. 5. Professional Language: Use respectful and professional l...

Read Complete Article HERE>»

“The July jobs report was almost uniformly positive with strong job gains resulting in a large drop in the unemployment rate,” said NAFCU Chief Economist and Vice President of Research Curt Long.

WASHINGTON–The U.S. economy roared into midsummer with strong gains in hiring, according to the latest jobs report, even as questions remain over the ability to maintain the momentum as the Delta variant of the coronavirus continues to spread. According to numbers released last week by the Labor Department, employers added 943,000 jobs in July. But the number comes with a caveat in that the data was collected in the first half of the month, before variant-related cases exploded in many parts of the United States. “The July jobs report was almost uniformly positive with strong job gains resulting in a large drop in the unemployment rate,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The retail sector did not enjoy a share in the gains, losing over 5,000 jobs during the month, but otherwise gains were broad. This report will add to mounting pressure on the Fed to taper asset purchases.” The numbers marked the best monthly performance since August 2020, and under...

Read Complete Article HERE>»

Mortgage Rates Decline to Their Lowest Levels Since April

WASHINGTON–Mortgage rates fell last week to their lowest level since early April. According to Freddie Mac, the standard 30-year fixed-rate mortgage averaged 6.87% in the week ending June 20, which was down from the prior week’s 6.95% average and marks the third consecutive weekly decline. Rates are down from a 2024 peak of 7.22%. “Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Federal Reserve rate cut,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market.” Most economists and forecasters expect rates ...

Read Complete Article HERE>»

NCOFCU is working hard for you! Coalition of CU Groups Sends Letter to Congress on Tax Exemption

Take Action Coalition of CU Groups Sends Letter to Congress on Tax Exemption May 1, 2025 10:15 am No Comments WASHINGTON–A coalition of credit union organizations has sent a joint letter to Congress in support of the credit union tax exemption. As the CU Daily has been regularly reporting, credit unions are especially concerned this year that Congress might revoke the tax exemption as it seeks ways to pay for expiring provisions of the 2017 tax cuts, which President Trump wants to see renewed. Sending the letter to Congress were the Defense Credit Union Council (DCUC), America’s Credit Unions (ACU), Credit Union Executive Society (CUES), National Association of Credit Union Chairs (NACUC), National Credit Union Management Association (NCUMA), Inclusiv, TruStage, Earnest Consulting Group (ECG), Callahan and Associates, National Council of Firefighter Credit Unions (NCOFCU), Metropolitan Area Credit Union Management Association (MACUMA), Association of Credit Union Audit and Ri...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog