Northwest Credit Unions Record Impressive Growth in Assets, Membership and Deposits

Northwest credit unions outpaced the national averages for both banks and credit unions in asset and deposit growth in 2013, an analysis by the Northwest Credit Union Association shows.

Membership growth also topped the national average for credit unions, according to Dan Hein, the NWCUA’s vice president of finance. Return on average assets (ROAA) and net worth are increasing, Hein says, while charge-offs and delinquency rates continue to decline. (See chart below.)

Hein’s snapshot of Q4 financial data also shows:

  • The growth in assets for Oregon and Washington credit unions has come from both loans and deposits. Northwest credit unions are slightly behind the national average for loan growth, but well ahead for deposit growth.
  • Northwest credit unions’ earnings performance was better than the national average, with an ROAA of 105 basis points compared to the national credit union average of 78 basis points. Overall, the nation’s banks performed slightly better in ROAA than Northwest credit unions.
  • Banks continue to have a stronger net interest margin than credit unions, both regionally and nationally. With the recent rise in long-term interest rates and an inevitable rise in short-term interest rates on the horizon, net interest margin will become an even more important ratio for credit unions to monitor, Hein says.

A closer look at cash and investments by credit unions shows an increased concentration in long-term investments. Given the rising interest rate environment, that should cause some concern about interest rate risk, Hein says.

From 2012 to 2013, he says, Northwest credit unions increased the amount of longer-term investments (with maturities of more than three years) from 29 percent of their investment portfolios to 37 percent. That mirrors the national trend, which saw an increase in longer-term investments from 25 percent of credit unions’ portfolios to 35 percent. (See graphics at right.)

Gaining slightly more yield will be good for credit unions today, Hein says, but could hurt a number of credit unions in just a few years.

Questions about this story? Contact Gary M. Stein: 503.350.2216, gstein@nwcua.org.

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