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Performance data through Sept. 30 paints the picture clearly. Loan growth reached 4.6%, share growth climbed to 5.2%, and member growth — after more than two years of deceleration — finally began to bend upward again at 2.0%. Even the median credit union, contending with changing demographics and intensified competition, held its ground with membership falling just 0.5%.

Notably, all this growth occurred without leaning on indirect lending, which remained essentially flat at 0.1% even as direct member engagement continued to rise.

Saving patterns further reinforced this engagement trend. Member share balances grew faster than the U.S. national savings rate. The types of share products reflect a membership keen on saving. Certificates and money markets carried more weight —  46.6% of total shares — even as members kept term lengths short and flexible.

On the lending side, the rebound was even more pronounced. Total originations jumped 17.7%, led by a surge in first mortgages, which accounted for 54.3% of real estate originations. Refinance activity climbed to 33% of total originations, its highest level since early 2022. Meanwhile, auto lending shrank slightly, declining 0.9% on balance sheets, reflecting tariffs, affordability pressures, and deliberate pullbacks from indirect channels.

Of course, numbers only tell half the story. The direct impact credit unions have on the lives of individual members is evident everywhere, including in these success stories:

• DuGood FCU offers 0% tool loans to trade-school students.
• Lake Trust guides new entrepreneurs through business-readiness training.
• Hello Credit Union partners with United Way’s 211 helpline to support families in crisis.
• Wright-Patt Credit Union reshapes access to affordable housing in Dayton.
• New Orleans Firemen’s FCU deploys 100% LTV mortgages to counter systemic barriers.

These aren’t anecdotes — they’re the operating system of cooperative finance.

Risk metrics held their own as well. Delinquency plateaued at 0.94% of total loans, with most categories dropping below where they were a year earlier. Charge-offs declined to 0.76%, reinforcing member resilience despite rising costs. Commercial real estate loans remain an area to monitor, with delinquency at 1.08%, high relative to the past five years but still manageable relative to historical norms.

Earnings were a standout. Total revenues reached $112 billion year-to-date, powered by higher loan yields and stable funding costs. The gap between the net interest margin and the operating expense ratio widened to 27 basis points, the largest opening in more than two decades, as more balance sheets shifted toward higher-yielding, member-driven lending. Operating expenses continue to rise — now at 3.11% of assets — but current margins offer rare strategic breathing room.

Technology trends added another layer of optimism in the third quarter. Credit unions aren’t using AI to shrink their workforce; they’re using it to sharpen the human edge. Marine Credit Union is applying AI to strengthen underwriting and risk modeling, whereas Premier America is using simulated dialogues to train branch staff in empathy, rapport, and confidence — proof that technology can amplify connection rather than replace it.

Capital remains robust, with net worth at 11.3%, supported by declining unrealized losses and strong earnings. Liquidity tightened somewhat as cash balances fell to 7.7% of assets, but available credit lines of $574 billion offer wide runway for funding if demand spikes.

The through-line across all of this is simple: credit unions perform best when conditions are hardest. Banks might excel in calm weather, but cooperatives are built for turbulence — for furloughs, sudden expenses, rising rates, and members who need someone to stand in their corner.

In a volatile year, credit unions didn’t chase the spotlight. They kept the lights on. And that steady glow continues to guide the communities they serve.

Trendwatch 3Q25 Is Available On-Demand

Callahan & Associates takes a look at third quarter credit union performance trends, exploring where the movement stands today and where opportunities lie for tomorrow.

Watch Now On-Demand

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12-MONTH COMPENSATION GROWTH VS. PRICE INFLATION
U.S. Workers| DATA AS OF 06.30.23
© Callahan & Associates | CreditUnions.com

• In the United States, employee compensation growth — which includes wages and benefit costs — has generally surpassed the national inflation rate. In a competitive marketplace, staff members with increasing skills and efficiencies likewise expect increased compensation relative to cost of living.
• During the pandemic, trillions of dollars of federal relief combined with record-low interest rates that increased overall access to money padded consumers’ budgets, leading to an increase in demand for goods and services at the same time quarantines and manufacturing shutdowns constrained supply. Naturally, prices rose.
• Unfortunately, wages and compensation were slow to adjust. However, the availability of remote work increased demand for many white-collar jobs as workers traded salary growth for workplace flexibility.
• Still, price inflation surpassed wage growth for nearly two years, which had a compressing effect on American’s budgets. Despite near-record employment, the national savings rate is the lowest it’s been since the Great Recession.
• The Federal Reserve’s higher-for-longer policy has finally started to lower inflation rates. In the meantime, labor markets have settled into a hybrid remote work environment, and wages are readjusting to attract and retain talent. Even as August inflation numbers came in above expectation, salary growth remains ahead of the curve.
• All told, compensation has finally surpassed inflation, bringing some much-needed relief to consumer budgets and brightening the near-term outlook for savings — a welcome sign for depository institutions in search of liquidity.

How Does You Compensation Compare?

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Total Investments Decline To Fund Lending

Total investments held by credit unions — including cash balances — declined 7.4%, or $49.0 billion, during the third quarter to $608.3 billion as of Sept.30. In total, $115.7 billion has flowed out of investment portfolios during the past two quarters, the largest decline in a six-month period on record by nearly $50 billion.

This outflow has reversed a sizable portion of the liquidity expansion posted during the pandemic. Total investments are now in line with industry totals at year-end 2020.

The primary driver of this decline in investment portfolios comes from cash balances, which declined 16.9%, or $31.4 billion, in the third quarter. Totaling $153.4 billion at the end of the third quarter, cash and equivalents comprised 25.4% of investments, down from 28.3% one quarter ago and 37.5% on year ago.

Despite the cash decline, cash balances on hand at credit unions increased 10.3% from June 30. This was the only investment category to expand during the quarter. Credit unions reduced cash held at the Fed by 23.8%, or $28.6 billion, quarter-over-quarter. Cooperatives have used significant cash to fund loans during the past six months; now, they will have to consider how best to generate liquidity to fund lending and help members.

Balances of non-cash investments decreased 3.7% quarter-over-quarter to $453.9 billion. U.S. government and federal agency securities — the largest investment asset category — suffered the largest quarterly decline in dollar terms. It contracted $15.0 billion, or 4.2%. Because this was a relatively small percentage decline compared to cash balances, this category’s share of the investment portfolio increased by 2.2 percentage points to 56.8% as of Sept. 30.

Other equity security balances, primarily mutual funds, declined 21.3% since June 30 and comprised slightly less than 1.0% of the investment portfolio.

The post What Happened In The Investment Portfolio In The Third Quarter? appeared first on CreditUnions.com.

QUARTERLY CHANGE IN UNREALIZED GAINS AND LOSSES VS. BORROWINGS
FOR U.S. CREDIT UNIONS | DATA AS OF 09.30.22
© Callahan & Associates | CreditUnions.com

• Loan balances were up 19.4% year-over-year as of Sept. 30, 2022, leaving credit unions in need of a source of funding to meet this record demand. Credit unions have been using cash investments as their primary funding source, repurposing much of the liquidity accumulated throughout the pandemic. Cash balances across the industry were down 42.0% since the third quarter of 2021 and 16.9% since midyear 2022.
• Cash balances comprised just 7.1% of industry assets as of Sept.30, down from 13.4% from one year ago and back in line with historical averages. Credit unions are now left with a few options to fund loans: attract new member deposits, borrow funds from the Federal Home Loan Bank or other sources, or sell termed investment products.
• Although some credit unions have attracted deposits through promotions — share certificates were up 7.9% since June 30 — members can only save so much when many are struggling to pay monthly bills.
• Portfolio managers are hesitant to sell termed investment products, such as treasury bonds or agency securities, because they would realize substantial losses. As interest rates have skyrocketed, bond investments have suffered, and total industry unrealized losses stood at $39.6 billion as of Sept.30, the most on record. If a credit union holds a bond to maturity — rather than selling to raise liquidity — unrealized losses go away.
• So, credit unions are turning to borrowing channels to boost liquidity. Industry borrowing balances were up 90.9% year-over-year as of Sept. 30. Borrowing is a costly source but remains a valid option to fund member lending.

The post Is The Credit Union Liquidity Crunch Finally Here? appeared first on CreditUnions.com.

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22

Callahan & Associates | CreditUnions.com

Source: Callahan & Associates

Credit union industry earnings are stabilizing after historic fluctuations in the past two years. First quarter year-to-date return on assets (ROA) is down 17 basis points from the first quarter of last year, which was a historic high. However, it is up 35 basis points from the first quarter value two years ago, in 2020, and is back in line with pre-pandemic levels.

While core interest spreads have been crunched by rate cuts, a main factor in the earnings swings has been provision expenses. In 2020, credit unions expected high delinquency during periods of quarantine-era unemployment, so they allocated money to cover these expected losses. These funds came out of earnings, reducing ROA for much of the year. However, thanks to government relief plans, this expected loan delinquency never came to be. With record-strong asset quality, credit unions found that they put too much money into their allocation accounts, and therefore were able to put less than the historical norm into their allowance accounts in 2021. In practice, the record earnings of 2021 were a taking back of extraneous provision expenses in 2020.

Operating expenses have risen throughout the pandemic, but not at the same rate as assets. This implies that credit unions are spending less to manage each dollar of assets under management than ever before. While financially efficient, credit unions must be sure that their resources are sufficiently able to support member needs. With strong capitalization and steadying earnings, the industry at large has some flexibility to invest in member service.

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Cash Balances Decrease

Cash balances totaled $251.0 billion as of March 31 and comprised 34.8% of the credit union investment portfolio. That’s down 1.6 percentage points from last quarter. Securities and investments grew 1.9%, or $8.9 billion, in the quarter to counter a large decrease in cash as credit unions invested in longer-term assets.

Credit unions allocated 49.4% to U.S. government and federal agency securities, the most of any of the top-level categories. Cash came in 34.8%, and credit unions spread the remaining 15.8% across various other debt and equity securities or insurance products.

Breaking down the cash segment, cash balances increased at all institutions where credit unions hold deposits. The crucial exception to this was the Federal Reserve. This is the largest segment and makes up 23.8% of the entire industry investment portfolio; however, cash balances deposited at the Fed declined by $11.3 billion in the first quarter, drowning out the inflows from the other, smaller cash segments.

Cash on hand at credit unions expanded $2.7 billion the largest increase among the cash holdings as credit unions transferred cash from the Fed to internal holdings. The large cash position built up by the industry during the past two years is slowly and consistently shrinking as lending activity picks up.

INVESTMENT PORTFOLIO

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22

CALLAHAN ASSOCIATES | CREDITUNIONS.COM

Investments Increase

Total investments held by credit unions increased just 0.3%, or $2.1 billion, during the past three months to reach $723.4 billion. This is the fourth straight quarter of sub-2% quarterly growth.

Credit unions used cash balances, which decreased 2.6% from Dec. 31, to fund renewed consumer loan demand amid a reopening economy and growing buyer confidence. Cash comprised 34.8% of the credit union investment portfolio. That’s down 1.6 percentage points from three months ago as rising yields made securities attractive relative to low-yielding cash. In government and agency securities, balances increased $10.7 billion, or 3.0%, from last quarter.

Shares at credit unions increased $64.3 billion from the fourth quarter of 2021, which caused net liquidity to increase $17.5 billion. A strong quarter of lending and a slower pace of early consumer loan paydowns pushed the loan-to-share ratio up to 70.2%. This is a welcome sign for lending institutions; however, it remains far below the pre-pandemic industry high of 84.5% recorded as of Dec. 31, 2018.

Even with heightened loan demand during the past year, the loan-to-share ratio has increased only 1.5 percentage points since March 31, 2021. Continued share growth deceleration will play a key role in balance sheet deployment, but new loans also must stick around for the long term.

The average mortgage rate rose to 5% at the end of the first quarter, making it attractive to keep mortgages on the balance sheet. First mortgages sold to secondary markets declined in the first quarter to $17.9 billion. That’s approximately half the amount sold in the third quarter of 2020, when attractive pricing incentivized institutions to sell mortgages at greater rates.

TOTAL INVESTMENTS AND QUARTERLY GROWTH

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22

CALLAHAN ASSOCIATES | CREDITUNIONS.COM

Derivatives: Notional Balances Increase

After declining for three consecutive quarters, notional balances rose to $28.6 billion a $4.3 billion increase quarter-over-quarter. On an annual basis, total notional balances were down 19.9%, or $5.7 billion.

Since the NCUA board approved its modernization of derivatives rule in May 2021 which allows for a more principles-based approach the number of credit unions that report derivative usage increased from 96 to 117. Looking forward, more credit unions might turn to derivatives as an alternate route to manage a variety of interest rate scenarios.

TOTAL NOTIONAL DERIVATIVES

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22

CALLAHAN ASSOCIATES | CREDITUNIONS.COM

To request a complimentary copy of the full First Quarter Investment Trends Report or to compare your own institution to the industry benchmark or a specific peer group, please contact Trust for Credit Unions at 800-237-5678 or TCUgroup@callahan.com

ABOUT TRUST FOR CREDIT UNIONS

Trust for Credit Unions (TCU) helps credit unions succeed in serving their members by providing a professionally managed family of mutual funds exclusive to credit unions as well as the information and analysis they need to support investment decisions. Created by some of the leading credit unions with oversight by a board of trustees, TCU’s mutual fund options allow credit unions to meet their short duration needs, are professionally managed, and are based on the cooperative values of credit unions.

Visit www.trustcu.com or call us at 800-237-5678 to learn more.

The Trust for Credit Unions (TCU) is a family of institutional mutual funds offered exclusively to credit unions. Callahan Financial Services is a wholly-owned subsidiary of Callahan Associates and is the distributor of the TCU mutual funds. ALM First Financial Advisors LLC is the investment advisor of TCU mutual funds. To obtain a prospectus which contains detailed fund information including investment policies, risk considerations, charges and expenses, call Callahan Financial Services, Inc. at 800-CFS- 5678. Please read the prospectus carefully before investing or sending money. Units of the Trust portfolios are not endorsed by, insured by, obligations of, or otherwise supported by the U.S. Government, the NCUSIF, the NCUA or any other governmental agency. An investment in the portfolios involves risk including possible loss of principal.

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With all those changes, some credit union leaders may still be struggling to articulate the differences to board members and auditors, but Callahan Associates is here to help.

Let’s go step by step through some of the biggest questions:

What Is The Call Report Modernization Process?

Back in 2016, the NCUA established its Call Report Modernization Process, which was intended to streamline reporting, reorganize and improve data collection, and accommodate the agency’s risk-based capital schedule. That initiative is now nearly complete, and all those goals were addressed in the first-quarter Call Report update. These changes led to a reduction in the number of codes credit unions are required to report though the scope of those changes depends on which capitalization ratio the credit union is required to complete.

The goals listed above put in place to accommodate the new capitalization schedules were the main driver of the 1Q22 changes. The NCUA hopes to protect the financial security of the industry in the event of economic downturn and has built out complex new risk-based reporting to do so.

Want to know more about the new Call Report changes? Just looking for the basics? More information is available here

Is My Credit Union Complex’?

Credit unions below $500M in assets are considered non-complexand still held under the same 7% capitalization requirement that was in place before these changes. However, credit unions above $500M in assets are held to one of two new capitalization ratios. If the institution’s capitalization is above 9%and they meet a few other risk-based balance sheet criteria they will qualify for the more simplistic complex credit union leverage ratio (CCULR). However, if they don’t qualify for CCULR, the credit union must complete the much more detailed risk-based capital (RBC) calculation. This latter formula is the impetus for most of the Call Report changes in 1Q22, as new investment and loan information is required to quantify the risk requirements.

As shown in the chart above, even if an institution uses the RBC calculation, there are fewer codes to compile than in previous quarters. This leaves a potentially lighter burden from a finance, accounting, and compliance standpoint (once credit unions reset their core processors to process these updates), but it negatively impacts analytical and business intelligence teams. Less data usually offers fewer opportunities for analytical insights.

What Has Changed?

It is undeniable that the 5300 is more cleanly organized than before, and categories now align across multiple sections of the Call Report more exactly than in the past. Delinquency and charge-off information is broken down to match the lien type categories in the loan and commercial loan sections. Investment categories on the balance sheet now align to better match the investment detail sections in the Call Report appendices.

All of this will allow for more detailed and helpful analytical insight over time. However, data between 2022 and prior years will not align cleanly for many metrics, preventing effective performance analysis. For some data, trend timelines have been reset to zero. The key financial categories most affected by inconsistent changes include:

• Investment portfolios
• Mortgages (both originations and balances outstanding)
• Asset quality

An example of this is shown below, for credit union first mortgage originations:

Annualized First Mortgage Originations

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22

At first glance, it looks like the credit union mortgage origination business declined by over 20% between 4Q21 and 1Q22. While the mortgage business is starting to hit some headwinds following two consecutive years of record lending, we know from market news that lending is not dropping off as significantly as it appears above. The reduction shown is the result of reporting changes by the NCUA.

Previously, the Call Report included commercial loans lumped in with first mortgage origination totals. As of 1Q22, this is no longer the case. Only 1-4 family residential property liens are included in the totals. Prior to 1Q22, we were unable to purely isolate residential mortgages commercial was inseparably included. Now, however, examining long-term first-mortgage trends will show totals for residential and commercial for all quarters up through 4Q21, following which only residential will be visible. As a result, it may appear as though mortgage originations fell off a cliff, when the true story is that commercial mortgages simply aren’t included in that reporting anymore.

Long-term, this is arguably a good change. Residential and commercial loan businesses are very different, and the risk profiles and business models behind these two loan types are distinct. They really shouldn’t be lumped together. However, the sudden removal of commercial data makes it more difficult to paint an accurate picture of the mortgage business over the course of 2022.

How Can Callahan Help?

The first mortgage example seen above is not the only case of inconsistent data following the changes. Many commonly used financial metrics have been affected by the reorganized Call Report. Sometimes, the new account codes can be MacGyver-edtogether to create some type of consistency over the periods. Callahan Associates has built a list of common formula updates in our 1Q22 Call Report change resources.

Other changes, like first mortgages, will be impossible to trend. As analysts, we can address these changes by understanding where they happened, and why.

The first step is to learn how the 5300 has changed. Old and new Call Reports as well as instruction guides and change resources from Callahan can be found at the link above and on the NCUA website.

What Else Do I Need To Know?

When analyzing data between 4Q21 and 1Q22, any visualizations that look strange should immediately be taken with a grain of salt. Keep your data BS metersset to high. If graphed data looks like an aberration, it is far more likely to be the result of reporting changes than any type of actual industry trend. Use the resources above to learn why these metrics have changed. Once you understand the change, you can explain it to your leadership team or board.

In some cases, common performance metrics may need to be retired for a few quarters until a new, consistent trendline has accumulated. Alternatively, you can continue to use these metrics if you understand the reporting caveats. This decision is up to you and your team, and the key to making it is knowledge of the data. In order to use any data to make informed strategic decisions, you must understand the source. The NCUA’s 1Q22 changes are sizable and there will be a learning curve for everyone, but the fundamental need to understand the source remains.

Take it upon yourself to become your internal expert on the new Call Report. This knowledge will be invaluable to your credit union’s analytical team in 2022 and beyond.

If all else fails, hang your hat on the fact that in three to five years, the credit union industry’s Call Report data should trend in a much cleaner and more organized fashion than ever before.

The post A Closer Look At Recent Call Report Changes appeared first on CreditUnions.com.

The changes are part of the Call Report Modernization Project that began in 2016. The project aims to reduce the reporting burden for credit unions by:

• Streamlining the call report process.
• Reorganizing and improving data collection.
• Accommodating the complex credit union leverage ratio (CCULR) and the risk-based capital (RBC) schedule.

CCULR Versus RBC? Which One Is Right?

Credit unions with less than $500 million in assets are considered non-complex credit unions. The regulatory capitalization rules for these credit unions remain unchanged.

Credit unions with more than $500 million in assets are considered complex credit unions. They must choose between regulatory capitalization formulas CCULR and RBC.

Complex Credit Union Leverage Ratio (CCULR)

The CCULR was designed to provide a simpler measure of capital adequacy for complex credit unions. If an institution meets the qualifications listed below, it may elect to use the CCULR.

CCULR qualification criteria include:

• A net worth ratio of 9% or greater.
• Off-balance sheet exposures of less than 25% of total assets.
• Trading assets and liabilities less than 5% of total assets.
• Goodwill and other intangible assets less than 2% of total assets.

If an institution qualifies for and elects the CCULR method, it does not have to complete the RBC schedule.

Risk-Based Capital (RBC)

If an institution has more than $500 million in assets and does not qualify for CCULR or elects not to use the CCULR option, it must complete the more complex RBC schedule on pages 24-28 of the new call report.

A credit union is considered well-capitalized if it uses the CCULR method or has an RBC ratio higher than 10%.

Of note: Complex credit unions with more than $500 million in assets are now allowed to issue secondary capital as subordinated debt and count this value toward their RBC calculation. Secondary capital issuance was previously limited only to credit unions with a low-income designation.

The post What’s New In The 5300 Call Report? appeared first on CreditUnions.com.

There were 39 mergers in the second quarter of 2021 and 31 in the first. That total, 70, for the first six months of the year is down one from the same time last year but brings the total from June 2020 to June 2021 to 135.

As of June 30, 2021, there were 5,005 banks and thrifts and 5,136 credit unions in the United States. By comparison, there were nearly 18,000 banks and thrifts in the United States and approximately 15,000 credit unions in 1985. It’s also worth noting that even after eliminating credit union mergers of more than $1 billion, 2021 has recorded the largest average credit union merger size by a wide margin.

Mergers By The Numbers

By total assets, the second quarter of this year saw far more merged away than in the first quarter of the year: $2.4 billion compared to $1.3 billion, or 78.5% more. For the first half of the year, total assets merged away was up 13.7% from the first half of 2021, $3.7 billion compared to $3.3 billion. In trailing one-year numbers, $7.2 billion in member assets were merged into other cooperatives from June 2020 to June 2021.

By average asset size, the average was $61.3 million for credit unions merged away in the second quarter of 2021, up 41.9% from the $43.2 million in average size from the first quarter of 2021. The average assets for merged credit unions in the first half of the year was $53.3 million, down 22.4% from $68.7 million on average in the first half of 2020 although one large $2.2 billion merger skewed the 2020 average value upward.

Industry Consolidation

For-profit and not-for-profit financial institutions have vanished by the thousands in the past 35 years, but banks have done so at a faster rate in recent years. Many small credit unions are resisting merger pressure as they continue to serve a dedicated field of membership.

Bank Acquisitions

Some credit unions are searching for partners in the banking space. Although only one credit-union bank acquisition has officially processed so far in 2021, nine more have been accepted and await regulatory approval.

Mergers By Quarter

Mergers picked up in the second quarter compared to recent periods as economies reopened and credit unions reevaluated their growth options.

Merger Rate Per Year

Mergers have slowed in the past few years, but an active second quarter picked up the projected pace in 2021.

Assets Merged Away Per Year

No credit unions with more than $1 billion have been a part of a merger so far in 2021. Consequently, total assets merging (as a percentage of the full industry) has slowed.

Average Merger Assets (Excluding Mergers >$1B)

Standardizing by eliminating outlying mergers more than $1 billion, 2021 has the largest average merger size of any year prior by a wide margin.

The Largest Mergers In The Past Year

By state, Ohio had the most mergers from June 2020 through June 2021 at 14, followed by New York at 11, Illinois at 10, Pennsylvania at six, and five each for California and Virginia. Only 11 states did not have a credit union acquired by another credit during that time.

The five largest mergers in the second quarter of 2021 were:

• XCEED Financial Credit Union ($981.8m, CA) merged with Kinecta FCU ($5.4B, CA)
• Infinity FCU ($336.3M, ME) merged with Deere Employees Credit Union ($1.4B, IL)
• Premier FCU ($251.6M, NC) merged with Charlotte Metro Credit Union ($798.9M, NC)
• Aspire FCU ($141.6M, NJ) merged with Pentagon FCU ($27.3B, VA)
• Leyden Credit Union ($100.6M, IL) merged with Partnership Financial Credit Union ($248.4M, IL)

The five largest mergers from the first quarter of 2021 were:

• Columbus Metro FCU ($259.0M, OH) merged with Telhio Credit Union ($951.8M, OH)
• NorthStar Credit Union ($211.8M, IL) merged with NuMark Credit Union ($332.6M, IL)
• Lower Valley Credit Union ($128.4M, WA) merged with Self-Help Credit Union ($1.5B, NC)
• Riverset Credit Union ($117.6M, PA) merged with Allegent Community FCU ($151.7M, PA)
• Anderson FCU ($107.5M, SC) merged with Spero Financial Credit Union ($543.0M, SC)

No credit unions acquired more than one other credit union during the first half of 2021. However, from June 2020 to June 2021, PenFed acquired three credit unions totaling $441.7 million in assets; 11 others merged two smaller credit unions into their cooperatives.

A 5-Year Lookback

From June 2016 to June 2021, there were 852 credit union mergers. That’s an average of 170 mergers per year. All told, $32.2 billion in assets were consolidated into another credit union during this period.

The average size of each acquisition was $37.8 million in assets. Five credit unions with more than $1 billion in assets merged into a larger credit union a super merger during the past five years. The largest was Schools Financial Credit Union ($2.2B, CA), which merged into SchoolsFirst FCU ($16.8B, CA) in the first quarter of 2020.

Meanwhile, five mergers over the past five years were reverse mergers, where the surviving credit union had less assets than the credit union it acquired.

During the past five years, Pennsylvania had the most mergers with 70, followed by Ohio (58), California and New York (54), and Illinois (50). Every state had at least one merger during that time.

PenFed recorded the most mergers during the past five years. It acquired 16 smaller cooperatives with a total of $2.2 billion assets. American Heritage Credit Union ($3.6B, PA) and Nuvision FCU ($2.8B, CA) had seven mergers each totaling $56.0 million and $785.3 million in assets, respectively. Superior Credit Union ($1.4B, OH) and Peach State Credit Union ($737.1M, GA) recorded six mergers each with total assets of $206.0 million and $113.2 million, respectively.

Bank Acquisitions

In addition to credit unions merging with credit unions, some credit unions have acquired either an entire bank or a handful of bank branch locations. Fourteen credit union-bank transactions occurred between June 2020 and June 2021. Four of these transactions were branch acquisitions, the other 10 were full bank acquisitions.

This article appeared originally on Credit Union Times on Oct. 11, 2021.

Merger Analysis In Peer-to-Peer

Callahan’s Peer-to-Peer can help you analyze a potential merger. Research the performance of potential partners, project the financial impact of merging with other institutions, and identify how your services and technology align. See it in action with a custom scorecard.

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