MADISON, Wis.-This year will go down as a record year for loan originations, membership gains and capital increases, noted an analysis released by CUNA Mutual last week.
"The first two help new and existing members improve their financial well-being and the third one helps ensure CUs are able to help even more members," wrote CUNA Mutual in its Trends Report, which included data through October of this year.
Noting that it usually "takes a while" to turn around lending growth following a recession, CUNA Mutual said it appears that trendline is now "heading in the right direction." Over the past year the total CU loan portfolio rose $24 billion (4.1%). A $13- billion gain in vehicle loans accounted for 54% of the increase, with first mortgages, primarily fixed-rate firsts, supplying 56% of the gain. With the exception of home equity loans and second mortgages, all portfolios contributed to the annual gain.
Not Everyone Growing
But not every credit union is growing loans. Data show 3,325 CUs (47% of all CUs) reported declines in loans outstanding between Q3 2011 and Q3 2012. The top 200 CUs (2.8% of all CUs) as measured by the largest dollar amount of increase, accounted for 84% of all loan growth during the past year.
Among the other findings in the CUNA Mutual Trends Report, which is based on data from CUNA:
* At 6.7%, CU consumer installment credit annual growth is at its highest level in 12 years. Increases in vehicle lending accounted for more than 86% of the gain, with positive contributions from the credit card and unsecured loan portfolios, as well as private student loans. Private student loans at CUs are up 43% year-over-year, but equal 0.3% of all CU loans.
* CU credit card portfolios are up 3.8% year-over-year while the rest of the market reported a 1.0% gain.
* More consumers/members are turning to CUs for auto financing, with October's 7.7% growth translating into a $13 billion increase, a "remarkable reversal" from the 0.8% contraction reported in October 2011," CUNA Mutual noted.
* Prior to the recession, the share of new and used vehicle loans were roughly equal. Today, used vehicle loans are almost double that of new. "Looking forward, we see vehicle loan portfolio gains being the driving force in overall CU loan growth, barring any shocks to this modest recovery in the consumer sector," CUNA Mutual said.
* Through the first nine months of 2012, CUs originated more than $89 billion in first mortgages, 65% above a strong 2011. CUNA Mutual is estimating 80% or more of this volume is refinances, and said a conservative estimate is $500 million annual cash-flow savings to members.
* In total, RE loans are up 1.8% YTD and 2.2% year-over-year. However, the 5.7% annual growth in first mortgages is being offset with 7.9% contraction in Other RE.
* Some 37.1% of all CU assets are in surplus funds (46% of those dollars are in cash or have a maturity of one year or less, with a spread on those dollars is just BPs).
* Savings growth of 5.9% is down from its 7.8% peak in August, but is projected to spike in Q4. CUNA Mutual noted that despite a continual lowering of rates, deposits continue to flood in. This has led to a 21% reduction in the cost-of-funds.
Assets To $1.03 Trillion
* At $1.03 trillion, industry assets are up 5.8% during the past year. CUNA Mutual aid it should be noted that 1,730 CUs (25% of all CUs) reported a loss of assets between Q3 2011 and Q3 2012. These CUs held 6.7% of industry assets.
* The nation's CUs finished October with a healthy 10.5% capital-to-asset ratio.
* Loans to shares rose slightly to 68.7% in October, but is down over past year.
* At the end of October, initial CUNA estimates show 7,134 CUs, a net loss of 37 CUs in October and 217 YTD.
* The 4,765 CUs with total assets below $50 million (68% of all CUs) hold just 6.5% of industry assets.
* At 96.2 million total membership is up 2.2 million YTD and 2.6 million (2.8%) since October 2011. But the CUNA Mutual analysis noted that while the YTD and year-over-year gains are very impressive, gains are highly concentrated. Between Q3 2001 and Q3 2012, CUs with assets in excess of $1 billion (195 CUs) accounted for 63.5% of all membership growth. During the same period, 3,485 CUs (50% of all CUs) reported membership declines.