KBRA Releases Third-Quarter 2023 U.S. Credit Union Compendium and Expectations for 2024

8 Dec 2023   |   New York


KBRA releases its third-quarter 2023 U.S. Credit Union Compendium, providing the latest view of the U.S. credit union (CU) sector, analysis of 3Q23 results for KBRA-rated U.S. CUs, and expectations for next year. KBRA's inaugural Credit Union Compendium provides a “state of the union” for CUs, with a focus on how industry fundamentals have evolved since the Federal Reserve began its tightening cycle in 1Q22. In KBRA’s view, the higher interest rate environment—which has included a cumulative 525 basis points of rapid hikes to the fed funds rate—has created a more challenging operating environment for CUs. That said, we have taken rating actions and will continue to take rating actions on CUs that underperform rating expectations. In this edition, we discuss earnings generation and potential net interest margin (NIM) stabilization, funding costs and mixes, credit trends, and core capital measures, among other key topics and trends in the sector.

The Compendium includes 3Q23 summaries on U.S. CUs in KBRA’s rated universe, focusing on key performance and credit metrics, along with medians of key ratios. The report also includes the top 10 lowest cost deposit franchises, highest reserves to loans, and largest sequential changes in return on assets, NIM, net charge-offs, and nonperforming asset ratios among all credit unions greater than $5 billion in total assets. In addition, we include key financial highlights for the top 10 largest CUs by total asset size.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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