Initial 1Q Results Show Continued Strength in Lending

First quarter bank results released thus far have been average at best. How are credit unions faring as of March 2008? A “first look” shows credit unions in a strong and active position.


First quarter credit union results have started coming in. Callahan & Associates' First Look Program has been actively collecting credit union call reports over the past week and so far has received results from 132 credit unions totaling $113.0 billion in assets, approximately 15 percent of the industry's assets.

These credit unions continue to persevere through turbulent times. As of March 2008, this group of credit unions posted 7.6 percent share growth and 8.5 percent loan growth. Growth in shares is down from an 8.2 percent annual rate as of March 2007, while loan growth has increased from 8.1 percent over that same period. Member growth is showing strength as well, growing at an annual pace of 5.1 percent, up from 3.8 percent in 2007. With an average asset size of $855.9 million, these numbers will be higher than the industry average but are a good indicator of industry-wide trends. Other initial first quarter results and trends can be seen here .

On the real estate front, this group of credit unions remains active in the market as others, such as Citi and WaMu, have pulled back in the first quarter. First mortgage originations are up an impressive 45.3 percent , while all real estate loans outstanding have increased 13.7 percent.

One credit union that is in the “eye of the storm” is Meriwest ($1.1B in San Jose , CA ). Despite being exposed to the deteriorating California housing market, this credit union posted strong results. Loans have increased 17.8 percent while shares grew at 15.2 percent.

Christopher Owen, CEO of Meriwest, shared his thoughts on how the current market environment has provided their credit union an opportunity. “With a number of mortgage providers leaving the market in 2007, and the recent lowering of interest rates, we've seen a dramatic increase in local applications. We are able to go into the vacuum created and provide assistance to our members. Having a strong balance sheet and underwriting standards presents us with many opportunities in an otherwise declining economic environment,” he states.

Related Resources

To participate in our free First Look Program and get a glimpse at individual credit union first quarter results, click here .




April 28, 2008



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