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Q2 Investment Trends: Assets Flood Into Loans

Loan balances grow 16.2% on an annual basis at the end of Q2, meaning CU assets spilled out of investments and into loans.

By Jay Johnson | September 02, 2022 at 09:00 AM
investments and quarterly growth graphic Source: Callahan’s Peer-to-Peer Analytics

Credit union balance sheets realized record share growth throughout the pandemic, mainly driven by government relief programs and increased saving rates during quarantines. Despite record mortgage loan originations, loan balance growth slowed through a combination of early repayments and credit unions selling low-interest loans to secondary market buyers.

In the first half of 2022 however, these trends have turned. After annual loan growth outpaced deposit growth in the first quarter of the year, all eyes were on whether this trend would continue. The mid-year numbers didn’t disappoint, with credit union loan balances growing 16.2% on an annual basis, almost doubling the 8.2% rate for shares. Of course, this meant credit union assets flooded out of investments – mostly excess cash balances – and into loans.

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