MADISON, Wis. — Credit unions saw incremental growth in a number of fields during the month of April, with lending, membership and other areas seeing continued increases, according to the latest
Among the highlights of the report:
- The number of credit unions continues to decline, with CUNA estimating 6,413 CUs in operation at the end of February, a decline of 11 from just one month before. The overall number of CUs has dropped by more than 100 in the last 12 months, compared to 96 lost in the first four months of 2014.
- Membership at credit unions rose by 387,000 during April (0.38% month over month), up from 333,000 (0.34%) in April 2014. Overall membership currently stands at 103.2 million, with an annualized growth rate of 4.3%, the highest in modern memory.
- Credit union loan portfolios grew by 1% during April, compared with 0.9% the year before. Overall lending has increased by 10.7% in the last year, slightly better than the 9.1% growth reported by community banks.
- Savings balances remain above the $1 trillion mark, though money market account balances fell by 1.1% as members paid their taxes. Consumers are also saving any money they save from low gas prices out of a belief that prices won't stay this low for long.
- Delinquency rates dropped from 0.84% last year to 0.77% year-over-year thanks to double-digit loan growth and improvements in the economy. Charge-off rates dropped to 0.47%.
Competition Heating Up
CUNA Mutual also found that competition from America's nearly 6,000 community banks is on the rise. Loan balances there grew by 9.1% year-over-year, deposits were up 4.9%, and loans grew by 5.7%. Return on average assets at community banks rose from 0.87% to 0.96%, and only 5.8% of community banks reported negative earnings, down from a whopping 22% at this time in 2010.
Loan balances at CUs rose by 2.4% during the first four months of 2015, slightly faster than the 2.1% seen during the same period last year and markedly better than the 0.9% growth rate for the first four months of 2013.
This is the fastest year-to-date pace for loan growth in a decade, and CUs are also picking up an improve percentage of the consumer lending market. Credit unions today have a 9.2% share of the consumer loan market, compared with 8.6% one year ago, but below the 9.8% share seen in 2005.
New auto loan balances rose by 23.7% (seasonally adjusted and annualized) during April, the fastest pace on record. Month-over-month, new car loan balances grew by 1.9% in April, compared with 1.2% at that time last year. Competitive rates are credited with driving much of that growth: the average credit union interest rate on a five-year new-car loan is 2.58% compared to the bank average of 3.87%.
Mortgage growth slowed slightly, down from 0.5% growth in April 2014 to 0.3% for April 2015. Adjustable rate mortgages — a whopping 30% of all first-mortgage loan balances — rose by 2.1%, while fixed rate loans dropped by 0.5%.
