Credit Quality Improves at US Credit Unions YOY in 4Q2021

Credit quality improved year over year at U.S. credit unions in the fourth quarter of 2021 as net charge-offs and nonperforming assets both fell, according to S&P Global Market Intelligence data.

The credit union industry's nonperforming assets ratio and net charge-off ratio both dropped 9 basis points year over year to 0.32% and 0.26%, respectively, but were up slightly quarter over quarter following normal seasonal patterns.

Aggregate nonperforming assets at U.S. credit unions dropped 13.1% year over year to $6.59 billion, while net charge-offs fell 21.2% to $816.9 million in the fourth quarter.

Meanwhile, U.S. community banks under $10 billion in assets reported a 0.56% nonperforming assets ratio at Dec. 31, down 27 basis points year over year and 8 basis points quarter over quarter. The net charge-off ratio for U.S. community banks was 0.11% in the fourth quarter, down 10 basis points compared to the year-ago quarter, but up 3 basis points over the third quarter of 2021.

Aggregate delinquent loans at U.S. credit unions fell to 1.18% of total loans and leases at the end of 2021, down 15 basis points since year-end 2020, but up 26 basis points compared to Sept. 2021.

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