The credit union industry has managed to add more loans but growth is slowing.
Credit unions nationwide gained 227,000 new memberships in November, according the latest CUNA Mutual Group report released on Wednesday. Loan balances were up almost 10 percent and savings balances increased roughly 8 percent for the same month, according to the report.
But differences emerged between large and small credit unions with loan growth. In the third quarter, credit unions with at least $1 billion in assets saw a 10.5 percent increase in loan balances, which was down from the 12.2 percent growth from a year earlier.
CUNA Mutual expects loan growth to slow down to 8 percent in 2019.
The economy is expected to grow 2.3 percent this year, down from the 3 percent reported in 2018. The unemployment rate is expected to remain under 4 percent and 2 million new jobs are should be created in the months to come.
Data from the National Credit Union Administration insurance report of activity showed 53 mergers were approved mergers in the fourth quarter. The average asset capitalization for merging organizations came in at $29 million whereas the average continuing organization was slated at $947 million in assets.
Credit union assets spiked by 1.3 percent in November which was double the 0.6 percent reported the year prior. Delinquencies fell to 0.66 percent in November due to tax cuts, lower gas prices and stronger loan growth, the report said.
Auto loans were once again strong and outpaced growth in other lending categories. Over the last 12 months, vehicle loans hit $35.8 billion, which is about 5 percent higher from a year earlier. However, auto sales are expected to slow in 2019 but not enough for growth to drop below 10 percent, the report said.
Finally, the average loan-to-savings ratio is forecast to hit a high of 86 percent by year end, which would be its highest level since May 1980.
