Credit Unions: What We’ve Seen and What We Expect To See

• Credit unions have seen their profitability continue to stabilize in 2014 when compared to 2012. Through the first six months of 2014, credit unions have maintained a return on assets of 0.80%.
• For the first half of 2014 the interest margins continue to tighten as yields on loans have continued to trend downward to 4.83% while yields on member deposits have only decreased slightly to 0.54%. Credit unions are looking for other sources of income.
• The number of credit unions in the nation has been declining but are still seeing steady growth in number of members, loans and total assets.
• In the first half of 2014 the amount of delinquent loans to loans fell by 0.18% to be on average under 1%.

• Interest yields are expected to increase marginally due to the anticipated Federal Reserve hike in short term interest rates. Credit unions may have to increase dividend rates to keep liquidity concerns under control.
• Loans are expected to increase as consumer spending rises in 2015.
• There is not expected to be any NCUA (National Credit Union Administration) corporate assessments in 2015.
• More demand and affordability of mobile products.
• More concentration on non-interest income, for example, increased fees or new products being offered.
• Technology advances will continue to change the member outlook on financial services.
• Addition of more value-added services to better serve the needs of members in the changing technology driven environment.