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Engaged members fuel CU loan growth: MCUE survey
MADISON, Wis. (9/2/14)--Credit union lending numbers continue to come in strong, with July's monthly and year-over-year increases notching levels not seen in years, according to the monthly survey of credit unions from the Credit Union National Association.
Click to view larger image(Source: CUNA Economics and Statistics)
"The monthly credit union estimates report first and foremost makes it clear that members remain engaged--reflected in a continuation of strong results in the lending arena," said Mike Schenk, CUNA interim chief economist.
"Overall, the 1.4% monthly increase in loans (16.7% annualized) is the fastest monthly advance since August 2005, and the 10.2% year-over-year increase is the highest seen in nearly a decade," he told News Now.
Year-to-date loan growth has increased 6.2% compared with 3.4% for the same period last year.
"Importantly the increases are broad-based with four of the key portfolios we track reflecting double-digit increases: new autos are up 19.7% over the past 12 months, followed by adjustable-rate mortgages (14.1%), used autos (13.4%) and personal unsecured loans (11.7%)," Schenk noted.
"Beyond this, we see solid increases in credit cards, which increased 7% in the past year and a decent 12-month jump in fixed-rate first mortgages (6.7%). Even home equity loans reflect a healthy increase--with a 5% increase compared with July 2013 levels," he said.
Only second-mortgage portfolios showed some weakness, with a 2% decline over the past year.
Schenk said, "Look for strong loan growth to continue, fueled by improving labor markets, higher incomes and an abundance of pent-up demand.
"Of course, those conditions will help to buoy credit union bottom-line results and are certain to push both delinquency and net charge-off rates lower in the coming months."
Click to view larger image(Source: CUNA Economics and Statistics)
Savings balances declined less in July (0.1%) compared with June's drop of 0.6%. One-year certificates experienced gains of 0.8%, while declines were seen in individual retirement accounts, share drafts, regular shares and money market accounts.
In June, the milestone of 100 million credit union memberships was reached. July's numbers show continued growth--0.4%--bringing the number to 100.5 million.
Credit unions' overall capital-to-asset ratio remained at 10.7%. The loan-to-savings ratio ticked up to 73% in July from 71.9% in June, and the liquidity ratio fell to 16.2% from 16.4% in June.

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