man looking at loan growth opportunities Source: Shutterstock.

Cue the drumroll … historic deposit growth across all asset size groups since 2019 has rolled forward into 2022. The NCUA’s Quarterly Data Summary reported that total industry deposits at March 31 reached $1.85 trillion, up 9.3% year over year – and by a startling 40.3% since 2019. These funds have been deployed largely into loan portfolios just as net interest margins return to a more normal range. Member satisfaction metrics are off the charts.

So, what’s not to like? Well, the biggest challenge is that net worth positions are getting crushed. Earnings are good but not good enough to offset the capital impact of a deposit tsunami. The industry Net Worth/Assets position dropped to 10.22% at March 31, a decline of 115 basis points in 27 months. Since it is merely an industry average, we know that many credit unions have dropped to an even lower level. Depending on how your credit union allocates funds into loan types, concentration levels and the resulting risk-based capital tolerances could be pushed toward your policy limits.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2023 ALM Global, LLC. All Rights Reserved.