The credit unions participating in Callahan & Associates complimentary
First Look program have reported strong growth in loan balances
in the 3rd quarter. These 607 credit unions representing approximately
24.7% of the industry with $158 billion in assets, have reported
strong lending activity throughout the year, but a lot of this lending
activity was part of a nationwide refinancing boom that resulted
in a lot of originations and small amounts of balance sheet growth.
However, during this most recent quarter, credit union originations
have had a much greater impact on the balance sheet.
These First Look participants grew loan balances 4.03% in the third
quarter, up from 2.64% in the second quarter. The loans credit unions
originated in this most recent quarter were far more likely to "stick"
to the balance sheet. In all, 16.88% of loans originated in the
third quarter were reflected in balance sheet growth, up from 12.62%
in the second quarter. Indicating a decline in refinancing activity,
the percentage of real estate loans granted that "stuck"
to the balance sheet jumped from 8.88% to 18.42%.
Credit unions' ability to grow loan balances on the balance sheet,
coupled with a seasonal slowdown in share balance growth, has resulted
in the first significant increase in their collective loan to share
ratio since 2000, as these credit unions grew the ratio 177 basis
points to 72.16%. The graph below shows the quarter-to-quarter change
in loan to share ratio as measured in basis points.