Credit union lending tops $800 billion in second quarter

Total lending at federally insured credit unions increased to $823.4 billion in the second quarter of 2016, up 10.5% from the same quarter a year earlier, the National Credit Union Administration reported Sept. 6.

“The credit union system again performed solidly in the second quarter,” NCUA Board Chairman Rick Metsger said in a news release about the report. “Loans continued to rise at a double-digit pace over the year with growth in every major category. New auto loans rose 15.6%, the fastest of all loan categories. Membership grew by 1.2 million for the quarter and 3.8 million for the year.”

According to Metsger, there were small increases in overall delinquency and charge-off rates relative to a year ago, and delinquency rates in some loan categories were significantly above the previous year’s levels. “Going forward, it’s important for credit unions to remain diligent in assessing underwriting risks to keep overall system risk to manageable levels,” he said in the release.

Figures were based on Call Report data submitted to and compiled by the agency for the quarter ending June 30.

According to the news release, loans grew in every major category year over year, including:

• New auto loans increased 15.6% to $107.3 billion.

• Used auto loans rose 13.1% to $173.0 billion.

• Total real estate lending grew 8.7% to $411.2 billion.

• Net member-business loan balances increased 13.6% to $61.8 billion.

• Non-federally guaranteed student loans expanded 10.9% to $3.6 billion.

• Payday alternative loans originated at federal credit unions rose 4.2% during the first half of 2016 to $119.9 million at an annual rate.

The delinquency rate at federally insured credit unions was 75 basis points in the second quarter, up 1 basis point from a year earlier, according to the release. The delinquency rate for nonfederally guaranteed student loans was 20 basis points higher than a year earlier, and the member business loan delinquency rate was 47 basis points higher than the year before, the release said.

Total assets in federally insured credit unions exceeded $1.25 trillion in the second quarter, a 7.4% increase for the year. Deposits at federally insured credit unions totaled nearly $1.1 trillion, an increase of 7.3% from the second quarter of 2015, according to the release.

Membership in federally insured credit unions in the second quarter of 2016 reached 104.9 million, a 3.8% increase from the second quarter of 2015, the release said.

Credit union system consolidation also continued in the second quarter, primarily as the result of mergers. The number of federally insured credit unions fell to 5,887, down 272 from a year earlier, with nearly two-thirds of the decline occurring in credit unions with less than $10 million in asset, according to the release.

Large credit unions reported the greatest growth in loans, membership and net worth, as well as the highest return on average assets, according to the release.

To read more about the report, see https://www.ncua.gov/newsroom/Pages/news-2016-sept-quarterly-data.aspx.

By |2019-11-25T07:59:07-06:00September 14th, 2016|Financial Services|0 Comments

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