Credit unions continue to increase their lending, with loans outstanding increasing 10.7% in the first quarter of 2016 compared with a year earlier, according to the quarterly report by the National Credit Union Administration.
Total loans at federally insured credit unions reached $799.5 billion at the end of the first quarter, according to the report.
Solid performance
“The credit union system again experienced solid performance during the first quarter of 2016,” NCUA Board Chairman Rick Metsger said in a news release. “Overall, new and used auto lending was especially strong, and the system gained 1 million members. With an influx of deposits, federally insured shares at credit unions also neared the $1 trillion mark, coming in at $991.7 billion.
“As credit union lending has increased, long-term investments have declined and reduced the system’s interest rate risk,” he said in the release. “However, delinquency and charge-off rates are slightly higher than a year ago, and member-business loan delinquencies are rising even more. Credit unions making such loans should take note and ensure that they perform proper due diligence to mitigate the risk.”
NCUA released the new figures, based on data submitted to and compiled by the agency for the quarter ending March 31.
According to the NCUA, loans grew in every major category year over year, including:
• New auto loans jumped 15.4% to $103 billion.
• Used auto loans rose 13.2% to $166.8 billion.
• Total first-mortgage loans outstanding grew 10.4% to $327.9 billion.
• Other real estate loans grew by 3.9% to $74.3 billion.
• Net member-business loan balances increased 13% to $59.8 billion.
• Nonfederally guaranteed student loans grew 10.9% to $3.6 billion.
• Payday alternative loans originated at federal credit unions rose 8.1% to $106.1 million.
Total investments, defined as investments greater than three months, by federally insured credit unions stood at $272.4 billion at the end of the first quarter, down 2.8% over the last year, according to the NCUA report.
Delinquencies increase
The delinquency rate at federally insured credit unions was up 2 basis points to 71 basis points in the first quarter compared with a year earlier, the report found.
Total assets in federally insured credit unions rose to more than $1.2 trillion at the end of March, an increase of 7.1% compared with one year earlier. Deposits at federally insured credit unions increased 6.8% during the same period to nearly $1.1 trillion, according to the NCUA report.
Membership grows
Membership in federally insured credit unions grew to 103.7 million in the first quarter of 2016, an increase of 3.8% from the first quarter of 2015. In all, credit unions have added 1 million members during the quarter and 13 million members in the last five years, according to the NCUA.
The number of federally insured credit unions fell to 5,954 at the end of the first quarter of 2016, which is 252 less than a year ago. The decline occurred primarily in the number of credit unions under $10 million in assets.
Large credit unions reported the fastest growth in loans, membership and net worth, as well as the highest return on average assets. Credit unions with assets of less than $10 million experienced declines in loans and membership. Credit unions with assets between $10 million and $100 million had positive net worth and membership growth, but loan growth decreased slightly. Credit unions with between $100 million and $500 million in assets, and those with more than $500 million in assets, reported increases in membership and loan growth and positive net worth.
For complete details of the NCUA’s first quarter report, visit https://www.ncua.gov/analysis/Pages/call-report-data.aspx.
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