Rising rates, strong economy fuel growth at Pennsylvania CUs in 2018

Pennsylvania credit unions closed out 2018 with significant gains across a number of metrics, including lending, membership and assets.

That’s according to a recently released analysis of National Credit Union Administration data compiled by Callahan & Associates for the Pennsylvania Credit Union League.

At the end of Q4, loans at Pennsylvania credit unions were up by 9.2 percent, along with a net worth increase of more than 7.5 percent. Assets rose 5.4 percent while overall membership was up 3.6 percent, though the average CU grew membership by more than 8 percent. Credit unions there last year also surpassed 4 million members.

While credit unions in the Keystone State exceeded the national average in areas like net income and lending, the state lagged slightly behind in areas like average interest income and expense, operating expenses, return on assets and noninterest income.

Mike Wishnow, senior vice president of marketing and communications at the Pennsylvania Credit Union Association, claimed much of that lag can be attributed to smaller credit unions, which struggle to grow at the same pace as their larger counterparts – a trend Credit Union Journal has reported on extensively.

“If you look at the mean credit union size, more than half of Pennsylvania’s credit unions are under $20 million in assets,” noted Wishnow. “If you were to take that cohort out, everything else would go through the roof.”

He credited a strong economy and rising interest rates with helping fuel much of last year's growth.

The state also saw 18 mergers last year – equal to the number seen in 2017 and, according to Wishnow, on par with what the state has seen for each of the past five years.

Some of the highlights from the report include:

• 12-month loan growth of 9.20 percent (9.05 percent national average)
• 3.6 percent membership growth (4.37 percent national average)
• 5.4 percent 12-month asset growth (5.41 percent national average)
• 1.3 percent noninterest income growth (1.40 percent national average)
• 0.85 percent ROA (0.92 percent national average)

Pennsylvania’s credit union growth stands in stark contrast to that of neighbors Delaware and New Jersey which, as Credit Union Journal has reported, continue to struggle across a variety of key performance indicators.