Early Data Indicate 4.4% CU Growth Rate In 2nd Qtr.

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Early indicators are pointing to a 4.4% growth rate in credit union lending during the second quarter.

According to data provided by credit unions participating in Callahan & Associates' First Look program, the lending volume was driven primarily by home loans, and helped the second quarter's growth rate to easily outpace the first quarter's 1.7% rate.

Callahan & Associates said that the 475 First Look program participants grew mortgage balances by 5.6% during the three-month period.

"The surge in mortgage applications in March translated to additional origination dollars, which was the primary catalyst for the 50% rise in dollar originations during the second quarter compared to the first quarter," the company said, noting the loan-to-share ratio for these credit unions continued its growth trend reaching 74.6%. Share growth was 2.0%.

Callahan EVP Jay Johnson noted, "With escalating inflationary concerns on the economic horizon, credit unions will be challenged with rising rates and balancing their loan and share growth objectives."

In the second quarter, the First Look participants reported an increase in service income of 8.9%, with operating expenses decreasing by 1.2% versus first quarter results. The decline in expenses resulted in a 100 BP drop in the operating expenses/total income ratio to 48.4%. Consequently, the sample group's return on assets ratio rose from 0.99% for the first quarter to 1.07% at second quarter's end.

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