3 Trends From Year-End Data

Preliminary fourth quarter highlights shine a light on 2010 performance.


Year-end data is flowing into Callahan's FirstLook Program, with nearly 50% of industry assets participating. What critical trends from 2009 will affect performance in 2010?

Share Inflows Continue

Although share inflows normally slow during the fourth quarter, member savings has not abated. Credit unions in the FirstLook group posted annual growth in shares topping out at 12.4%. Quarterly growth, despite the season, increased to 2.23%, up from third quarter's quarterly growth of 0.73% for the same credit unions.

Share Balances Increase At Double Digit Pace, Accelerating Through Year-End

The Need For Lending

With additional shares to allocate and with investment yields near all-time lows, credit unions cannot rely on investment income to support lower interest income from slowing loan volume. The last time investment yields were this low was in mid-2003. This time, however, credit unions with capital constraints must earn their way back. With low yields, credit unions must lend to enhance income.

The Gap Between Loan And Investment Yields Nears Widest Point

Loan Growth Slows

Annual loan originations accelerated over 2008 levels. Posting $137.7 billion in new loans, the FirstLook credit unions increased originations by 6.8%; however strong sales to the secondary market affected balance sheet growth. Credit unions currently in the FirstLook program posted annual loan growth of 2.8% since year-end 2008. The same credit unions posted 12-month outstanding loan growth of 4.9% in September, indicating slower loan growth for the larger industry. Outstanding loans declined on a quarterly basis for the FirstLook credit unions by 0.2%.

Annual Loan Originations Accelerate From 2008 Levels