Last year was the most successful year ever for the credit union industry, according to year-end data submitted by more than 97% of the industry.
“The year’s performance provides ample reasons to celebrate,” says Jay Johnson, executive vice president for the financial consulting firm Callahan & Associates. “Credit unions posted the highest ever contribution to capital and set a new record for mortgage market share.”
Credit unions added $6.4 billion in earnings to their bottom lines with another $1.9 billion contributed to the NCUA insurance reserve expenses. The NCUSIF also reported a record bottom line of $620 million, the highest ever. NCUA reduced the allowance for losses by $613.9 million, from $1.22 billion one year ago to $606.1 million at December 2011. This is more than a 50% reduction in just one year.
In addition to capital and market share, the 7,091 credit unions for which 5300 Call Report data is available are reporting double-digit core deposit and positive lending growth. Regular shares and share drafts grew at a pace of 11.3% and 12.2%, respectively. Over the past five years, core deposits have increased a whopping 77%, underscoring that for credit unions, it's all about the member relationships.
In 2011, credit union members opened more than 2.3 million new checking accounts, the first time in history the number surpassed two million. This growth rate of 5.1% is more than three times the overall membership growth. The average credit union relationship, including both loan and savings accounts, grew to almost $15,000.
On the lending side, consumer loan originations increased more than $150 million, or 11%. In total, credit unions originated the second highest loan volume in their history at $262.5 billion. This number is just shy of the peak set in 2009 during the refinance boom. First mortgage market share grew to an all-time high of 6.5% with the trend continuing into 2012.
Fourth quarter 2011 performance data was impressive, too, Johnson says. Credit unions set a record in fourth quarter loan originations, $72.4 billion, and member growth was 32 times the average of the past six years. In the last three months of 2011, almost 725,000 new people joined credit unions with states from Washington in the west to New Hampshire in the east growing their membership rosters to new highs.
“Credit unions had an exemplary year; they had a fantastic fourth quarter,” Johnson says. “More importantly, they’ve set the pace for an even better 2012.”