A Preliminary First Look at CU Performance in a Tumultuous Third Quarter

How did credit unions perform in the tumultuous 3Q economic environment? Get a ‘First Look’ as preliminary data becomes available.

 
 

The Third Quarter of 2008 will most likely be looked back upon as a watershed historical moment when the core of the American financial landscape fundamentally changed. In the brief period between July, and September, we experienced in remarkably quick succession, the failure of IndyMac, Washington Mutual, and Lehman Brothers, while Fannie Mae and Freddie Mac were placed in conservatorship. Consolidation at the highest levels of the banking industry coincided with the end of investment banking, as Goldman Sachs and Morgan Stanley converted to bank holding companies. The government rescued AIG, and placed a temporary halt on short-selling, while Congress worked to hammer out the financial bailout legislation that passed shortly after the third quarter ended.

Now take a deep breath.

This wild ride has continued well into the fourth quarter and shows no signs of halting. The long-term impact of this turmoil will certainly be significant, but is impossible to accurately gauge at this time. To date, government efforts to combat the financial crisis have primarily focused on the institutional level. Although recent discussion has suggested another economic stimulus package for taxpayers, individuals have thus far been left to fend for themselves, as they watch the housing market and Wall Street hemorrhage before their eyes. Our economy is fundamentally built upon the backbone of the American consumer, and those individuals will need to regain their confidence before the economy will be on firm footing once again.

With much of the financial services industry and infrastructure ravaged during the third quarter and retreating market, many people are wondering where they can turn for sound financial services. Unlike other types of financial institutions, the majority of credit unions continue to project 'business as usual' during this critical period. Some credit unions have responded with public messages of safety, soundness, and 'business as usual,' while others have simply used their strong capital levels and liquidity to step in and provide loans to credit-worthy members who were unable to turn to other financial institutions.

Preliminary third quarter data indicates that many credit unions have continued this positive lending and deposit momentum that the industry has experienced over the past year. Callahan recently launched its quarterly First Look Program, allowing credit unions to compare performance data weeks before complete figures are released by NCUA. First Look credit unions currently account for $105 billion in assets, or approximately 13 percent of the entire industry. Here are some of the successful results from a range of leading institutions all across the country:

Star One CU (Sunnyvale, CA, $3.88 billion)

  • Originated $805 million in loans YTD
    • 108.5% growth over 3Q 2007 YTD
    • 5,768 loans originated YTD
  • 12-month outstanding 1st mortgage loan growth: 60.2%
    • 3,650 loans outstanding for $1.1 billion
  • 12-month member growth: 5.7%
  • ROA: 1.43%

Pennsylvania State Employees CU (Harrisburg, PA, $3.21 billion)

  • Originated $878 million in loans YTD
    • 16.7% growth over 3Q 2007 YTD
    • 52,053 loans originated YTD
  • 12-month outstanding 1st mortgage loan growth: 24.6%
    • 3,116 loans outstanding for $308 million
  • 12-month share growth: 12.3%

Coastal FCU (Raleigh, NC, $2.03 billion)

  • Originated $826 million in loans YTD
    • 20.7% growth over 3Q 2007 YTD
    • 23,679 loans originated YTD
  • 12-month share growth: 12.3%
  • 12-month member growth: 9.9%

Austin Telco FCU (Austin, TX, $664 million)

  • Originated $97 million in loans YTD
    • 21.2% growth over 3Q 2007 YTD
    • 3,516 loans originated YTD
  • 12-month outstanding other real estate loan growth: 137.1%
    • 1,557 loans outstanding for $101 million
  • 12-month share growth: 24.5%
  • ROA:1.45%

Mutual Security (Wilton, CT, $212 million)

  • Originated $53 million in loans YTD
    • 30.3% growth over 3Q 2007 YTD
    • 2,228 loans originated YTD
  • 12-month outstanding 1st mortgage loan growth: 13.5%
    • 1,250 loans outstanding for $299 million

These credit unions all experienced a great deal of lending success, but more importantly, they continued to provide stability and a full range of services in the midst of economic turmoil to their members across the country. As Callahan receives additional credit union third quarter data, we will publish further comprehensive analysis in the coming weeks. We anticipate that credit unions will continue to take advantage of the growth opportunity in the current market, as competitors retreat.

Callahan's First Look program allows credit unions to compare performance data weeks before complete figures are released by NCUA. To participate in Callahan’s complementary First Look program and get a glimpse at credit union third quarter results, simply upload your data through our new Peer-to-Peer 2.0 performance analysis tool or email your 5300.xml file to 5300@creditunions.com.

 

 

 

Oct. 27, 2008


Comments

 
 
 
  • Insghtful!
    Anonymous
     
     
     
  • The First Look Page is down.
    Anonymous
     
     
     
  • When the NCUA changes their 5300 submittal process to be web-based in 2009, will this valuable First Look program still be available? How will CUs submit their 5300 reports to Callahan?
    Anonymous