WASHINGTON-America's CUs should cross the threshold of $1 trillion in total assets sometime in 2011, following growth across the board in 2009, according to a new analysis.
Consumers are still feeling the pain of the recession because the credit crunch continues - with CUs as the big exception, according to Callahan & Associates EVP Jay Johnson, who noted that CUs "stayed in the market, stayed consistent and continued to lend." That's a stark contrast to major banks, which "cut more than $1 trillion in lines of credit to consumers and on the commercial side," added Senior Industry Analyst Nick Connor.
While mortgage loan volume hit new records last year, CUs sold more than half the real estate loans they originated, selling $51.4 billion worth of mortgages to the secondary market. Callahan's reported significant declines in auto lending in 2009, but Johnson expects competition to return later this year and into 2011.
All that loan volume, however, paled in comparison with the surge in deposits. CUs took in $71-billion in new shares during 2009, including double-digit percentage growth in share drafts, regular shares, money market accounts and IRAs. The trend pushed the industry average loan-to-share ratio down to 76%, as well as industry average net worth down to 9.9%.
Connors stressed the importance of turning the new deposits into earnings and reinforced the idea that those earnings will have to come from member lending.
