As of Sept. 30, 2014, credit unions held more than $356 billion in investments. Although the total assets of credit unions remained near the all-time high of $1.11 trillion, total investments decreased $23 billion from second quarter’s $379 billion. This decrease in investments is the result of a seasonal pattern of increased lending in the second and third quarters. Increased lending in the third quarter this year bumped the industry’s average loan-to-assets ratio from 60% to 62%.
Longer-Term Balances Shrink
The average investment maturity for all U.S. credit unions in the third quarter of 2014 remained relatively unchanged versus the second quarter of this year. It is important to note that the total investments in the 5 to 10 Years and Over 10 Years buckets shrank by a total of $6.5 billion. These longer-term securities now represent only 10% of all credit union investments. This shortening of portfolio maturities is most likely caused by a combination of securities rolling down the curve, with shorter average lives for certain mortgage securities and agencies calling some of their debt playing a role. Securities with Maturities Less than 1 Year and Cash remained at the 40% level due primarily to credit unions’ liquidity needs and the funding of new loans.
More Investment Trends & Customized Investment Reviews
Interested in more information about the overall industry’s average yield on investments, new weighted average life data and investment growth rates? Download your complimentary copy of the full Q3 Investment Trends Review from www.trustcu.com today or contact us at TCUGroup@callahan.com to learn more about the customized investment reviews we can provide for your credit union.
TRUST 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, TRUST’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 & Associate and is the distributor of the TCU mutual funds. Goldman Sachs Asset Management is the advisor of the 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.