In 2010, many credit unions focused on three areas: earnings, asset quality, and loan volume. Credit unions, in aggregate, recorded the highest fourth quarter ever for loan originations. For the year, credit unions originated $248 billion in loans; this is slightly below 2009’s refinance-fueled highs of $268 billion but still higher than 2007 and 2008 levels.
Of the $248 billion in loans originated in 2010, more than one-third were first mortgages. This is the third highest level on record behind the 2003 (33.9%) and 2009 (35.0%) re-fi booms.
With the loan volume success, credit unions have been selective about which loans to keep on their balance sheets. In the current low interest rate environment, credit unions must judge whether to hold onto long-term fixed-rate assets, find other lending vehicles, or invest in even lower-rate institutional investments.
Source: Callahan's Peer-to-Peer
In 2010 credit unions sold 52.2% of the first mortgages made in the year, which is slightly less than 2009 levels. First mortgages are the largest component of the industry’s loan portfolio, and their sales pushed total loan growth negative for the year to -0.60%. If credit unions had kept the $43.8 billion in loans, the industry’s loan growth would have been 7.1%.