ALEXANDRIA, Va.—More than a year after CUNA declared that credit unions had surpassed the 100 million-member mark, NCUA today confirmed it, citing that membership at federally insured CUs rose to 101 million members in the quarter ending June 30.
“Across America, there’s a growing recognition that credit unions offer solid value to their members,” NCUA Board Chairman Debbie Matz said in a statement. “More people see credit unions as an affordable financial services alternative. Credit unions continue to increase lending while taking steps to shed certain investments that would pose risk when interest rates inevitably begin to rise. All these trends are signs of a robust system.”
More than 3 million new members joined credit unions between the end of Q2 2014 and Q2 2015, but even as membership rolls rose, the overall number of credit unions dropped by 4.2%, a decline of 270 credit unions.
Last summer CUNA announced that credit union membership had surpassed 100 million members, but NCUA has not marked that milestone until now, since CUNA’s figures account for membership at all credit unions, whereas NCUA’s data only includes federally insured credit unions.
A statement from CUNA emphasized that consumers are attracted to credit unions’ cooperative structure and not-for-profit model.
“We’re proud of the fact that America’s credit unions represent the best interests of millions of Americans—and growing about four times faster than the U.S. population,” a representative for the trade group said.
NAFCU also chimed in, with President and CEO Dan Berger pointing out in a statement that CUs’ “exceptional member service, competitive rates, low fees and low-cost, high-quality loans are a formula for success for their members and our nation’s economic growth.”
Good News For Lenders
The good news about membership growth came along with more positive news regarding auto and real estate lending at credit unions. Total loans reached $745.2 billion in Q2, a 3.2% increase from the previous quarter and a lift of 10.6% from one year prior.
Among the highlights on the lending side:
*New auto lending saw a 19.5% year-over-year rise, hitting $92.8 billion, a 3.9% increase from the previous quarter.
*Used auto loans grew to $152.9 billion, a 3.8% increase from Q1 and up 13% year-over-year.
*First mortgage loans rose to $306.2 billion outstanding, a 3.1% incrase over the previous quarter and growing 9.6% year-over-year. Second mortgages also saw a lift, rising 0.9% from Q1 and 2.4% year over year
*Member business loans also saw a rise of 11.2% year-over-year, growing to $54.4 billion in overall balances, a 2.9% jump from Q1 2015.
*Non-federally guaranteed student loans dropped by 0.6% from Q1 to $3.3 billion, though that area of lending has still grown by 13.5% since Q2 2014.
Investments Down As Rate Hike Looms
NCUA also reported that total investments declined by 4.2% year-over-year. Investments with maturities of three years or less was the only category to see an increase (16.3%), while investments of maturities of more than 10 years saw a yearly decline of 29.6% to $4.8 billion.
Other highlights from NCUA’s data include:
*Net incomes rose by 4.2% ($96.1 million) to $2.4 billion year-over-year, marking 22 consecutive quarters that CUs have recorded positive net income.
*Aggregate net worth ratio hit 10.92% at the end of Q2, a rise of 16 basis points from the end of Q2 2014.
*delinquencies rose from 69 basis points in Q1 to 74 basis points at the end of Q2, but that figure is still below the 85 basis-point level seen at the end of June 2014. Net charge-off ratios declined to an annualized 46 basis points, and year-to-date loan charge-offs as a result of bankruptcy were at 17.3%, 198 basis points below where they were at the end of Q2 last year.
*ROA stands at 81 basis points year-to-date, equal to where it stood at the end of the second quarter last year. Seventy-seven percent of CUs reported positive returns during the first half of 2015, three percentage points more than reported positive returns in the first half of 2014.
*CUs with assets of $500 million or more continue to see the lion’s share of growth within the credit union system, with 467 credit unions holding seven out of every ten dollars of system assets at the end of Q2, according to NCUA. Those Cus also saw the strongest growth in loans and membership, and the highest ROA.
