Small CUs Generally Well Capitalized
With an average net worth of 14.75%, small credit unions with assets under $20 million are generally well capitalized.
That's the good news, according to the September edition of CUNA Mutual Group's Credit Union Trends Report. However, for some credit unions in this asset group, rising compliance costs and combined economic and assessment stresses may force them to consider merger partners. At mid-year, 4,288 credit unions were in this under $20 million group, down from 4,509 just six months ago.
At the end of July, there were an estimated 7,978 credit unions representing a net decline of 252 financial institutions over the past year including 13 in July alone. Still, the current rate of industry consolidation is well below recent trends for year-to-date and year over year declines, according to the data.
According to CUNA Mutual Chief Economist Dave Colby, based on NCUA's monthly insurance report of activity and announced mergers in the media, the rate of industry consolidation will likely be revised higher and this trend is forecast to continue over the next few years.