First Look: Credit Unions on Record Lending Pace in 2009

According to data from Callahan & Associates' First Look program, credit unions are on pace for a record year of lending at a time when credit availability remains a key issue across the nation.

 
 

According to data from Callahan & Associates' First Look program, credit unions continued to expand lending to members in the second quarter.  First Look participating credit unions granted 9.4% more loans through the first six months of 2009 compared to this time last year.  This growth puts the industry on pace for a record year of lending at a time when credit availability remains a key issue across the nation. 

Loan Originations Near Double-Digit Growth According to First Look Data

First Look credit unions' 9.4% loan origination growth was largely propelled by real estate lending.  Participating credit unions issued $25.2 billion in first mortgage loans during the second quarter, 16.1% more than they granted in the first quarter of this year and 40.5% more than they issued by the end of the second quarter last year.  First mortgage lending, driven by refinancing activity, helped to grow participating credit unions' total real estate loans granted YTD by 21.4% compared to the first half of 2008.

Real estate lending is not the only component of the credit union portfolio that is growing.  Credit unions are also increasing their non-real estate lending to members as well. Participating credit unions' non-real estate loan volume is up slightly, 0.5%, in 2009 compared to the same period in 2008. 

Credit unions continue to step up to fill members' needs in this period of financial uncertainty.  Below are the top ten First Look credit unions with over $100 million in assets by loan volume growth for the first half of 2009.

Loan Originations in Dollars Year-to-Date through June 2009

Data as of June 30 for all First Look Credit Unions

Rank

State

Name

Annual Growth
in Loan Originations

1

CA

Aerospace

662%

2

MA

First Priority

619%

3

OH

The Ohio Educational

315%

4

MA

Industrial

297%

5

WA

Group Health

275%

6

MA

Direct

253%

7

TX

Advancial

251%

8

FL

Insight Financial

244%

9

CA

San Francisco Fire

236%

10

NY

USAlliance

223%

Credit Cards Lead Outstanding Loan Growth

First Look credit unions also grew loans on their balance sheet during the second quarter, bucking last quarter's decline.  Between 2Q 2008 and 2Q 2009, First Look credit unions increased their total loan portfolio by 4.9%.  This rate is below the 9.5% growth rate posted by these credit unions a year ago, reflecting a decline in consumer demand over the same period.  On the bright side, this number represents a pick up from 1Q, when these credit unions posted a slight decline in outstanding loans. 

The fastest growing component of participating credit unions' outstanding loan portfolio in the second quarter was credit cards.  First Look credit unions grew their credit card balances by 3.2% during the second quarter; approximately the same growth rate they experienced as of 2Q 2008.

In terms of asset quality, delinquency for the entire portfolio increased to 1.56% in the second quarter up from the 1.40% figure reported in the first quarter.  Although the delinquency rate continues to climb it remains well below that of FDIC-insured institutions.

Callahan & Associates First Look Program

Callahan & Associates' First Look program currently captures data from credit unions holding $691.2 billion in assets, or approximately 79.5% of the total industry.  First Look data suggests that credit unions are playing an important role in the economic recovery by providing needed credit to members.

Callahan & Associates First Look program compiles 5300 call reports in order to be able to provide more timely analysis on the credit union industry.  If you are interested in participating in our First Look program, please email your credit union's 5300 xml file to 5300@creditunions.com

 

 

 

Aug. 3, 2009


Comments

 
 
 
  • Larry,

    While first look credit unions have been on record pace issuing first mortgage loans their balance sheets have been relatively unchanged. First mortgage loans outstanding on their balance sheet increased 1.75%, which shows that a large percentage of the first mortgage loans can be attributed to refinancing or are being sold on the secondary market. Hopefully this does something to assuage your fears.
    Sam Brownell
     
     
     
  • It's a little disconcerting that the industry is loading up on real estate in a period of historically low rates. What do we know that the S&L guys didn't in 1979? Hope I'm wrong.
    Larry Davis