The 698 credit unions that have reported to Callahan & Associates’
First Look program collectively posted a strong performance through
third quarter 2002. These credit unions, representing 28% of the
industry with $157 billion in assets, are generating a larger portion
of their income through loans. Although the industry has not originated
loans to the same lofty standards set in the nineties, credit unions
are still primarily lending operations. To be successful, credit
unions must earn income through lending in any environment.
Two years ago, the credit union loan to share ratio was at an all
time high after finishing a decade of double-digit loan growth coupled
with single-digit share growth. (The graph below shows the loan
to share ratio of the First Look credit unions.) The last two years
have seen a complete flip-flop, with shares growing at a tremendous
pace and loans slipping into single-digit growth territory. The
growing gap between shares and loans on the books led to a 23% growth
in invested dollars over the last twelve months.