ALEXANDRIA, Va. — Loan balances at credit unions are by more than 10% year-over-year for the third quarter, according to new data released Thursday by NCUA.
Among the highlights of the data released by the agency:
- New auto loans rose 19.4% to $82.4 billion
- Used auto loans are up 12.2% to $140.3 billion
- New MBL balances grew by 12.6% to $50.4 billion
- Non-federally guaranteed student loans grew by 21.9% to $3.1 billion
- First mortgages were up by 9.1% to $286.4 billion, with 60% of those holding fixed interest rates
- Second mortgages rose by 1.1% to $71.5 billion. This is the first time since Q2 2009 that second mortgage loans have not contracted year-over-year
- Loan-to-share ratio rose by 4.3 percentage points to 74%, its highest mark since Q4 2009
- Delinquency rates and net charge-offs were flat.
"An improving economy stimulates loan demand, and lending growth contributes to continued economic growth," NCUA Chair Debbie Matz said in a statement. "So, it comes as no surprise that the credit union system grew with and boosted the economy in the third quarter.
"The fact that credit unions are turning towards making loans and reducing their reliance on long-term investments is encouraging. A loan to a member is the best investment a credit union can make and benefits members directly. To protect the safety and soundness of the credit union system, NCUA will continue to carefully monitor signs of interest-rate risk."
NAFCU subsequently released a statement praising the new data from the regulator.
"The NCUA's third-quarter Call Report data on loan and membership growth indicates a still-growing trend of credit unions becoming the financial institiutions of choice for many," said president and CEO Dan Berger. "These figures affirm that people are increasingly seeing the value of credit unions' prudent business model combined with very competitive rates, low costs and fees, as well as exceptional member service."
NCUA's data also showed that long-term investments by CUs continue to decline, dropping by $5.1 billion (1.7%) year-over-year to $288.4 billion.. But investments with maturities of three years or less grew by $2.9 billion from Q2 and $2.4 billion year-over-year. Investments with maturities of greater than three years.
While CUNA's rallying cry for much of 2014 has been that credit unions have hit the 100 million member mark, NCUA's figures — which include only federally insured CUs — show membership at 98.7 million, a lift of 808,900 members in Q3.
As membership rises, however, the number of credit unions continues to decline, with NCUA reporting 270 fewer federaly insured credit unions operating at the end of Q3 2014 than at the same time in 2013. That's a decline of 4.1%, to a total of 6,350 credit unions.
But overall the system remains well capitalized, with an aggregate net worth ratio of 10.93%. ROA and net income are both up as well, as is net worth, as assets and shares continue to rise.
Total assets for Q3 stood at $1.1 trillion, a growth of $51.2 billion or 4.8% year-over-year.
The Great Divide
Credit Union Journal has reported extensively on the "Great Divide" among large and small CUs and the struggle for small credit unions to grow, and NCUA's data showed that CUs with assets of less than $10 million saw higher net worth ratios but slower growth in loans, net worth and ROA, along with declines in membership.
Those CUs — which constitute 31% of all credit unions — saw an ROA of only 4 basis points, compared with a 97 basis point return for CUs above $500 million in assets (approximately 7% of all CUs).
