Second Quarter Numbers Show Growth in Key Areas

An early look at pre-release second quarter data shows positive growth in loans, shares and members from the previous quarter.

 
 

Preliminary data for the second quarter of 2007 is in and the numbers have a story to tell. Loan growth and share growth are both on the rise coming in at 8.5% and 10.5% respectively from this time last year. Real estate lending also saw an annual rise of just over 11%. Member growth was up 5.5% for the year, which led to increases in both number of branches and office-related expenses.

Although the official data will not be available for a few weeks now, we are able to gain some insight into preliminary second quarter data thanks to Callahan’s First Look program. This program resulted in 152 credit unions, which combined for a total asset base of $142.7B and an average size of $939M, reporting a “first look” at their second quarter numbers.

Annual Growth Figures for First Look Credit Unions

2Q06

1Q07

2Q07

Loan Growth

13.44%

9.38%

8.47%

Share Growth

7.07%

9.41%

10.56%

Member Growth

4.92%

4.61%

5.48%

A key item of note in the preliminary second quarter data was growth in both total loans and total shares. Although both categories were up from last quarter, share growth outpaced loan growth for the first time since 2003. This share growth bodes well for credit unions as the share growth numbers were above the numbers for member growth, indicating an increase in share accounts per member and not just growth in total membership.

Loan growth in the second quarter was driven by healthy growth in real estate lending as well as an upturn in auto loans after a decline the past few quarters. The growth in real estate comes despite the slowdown in the real estate market nationally. Although numerous lenders are reporting asset quality issues with real estate, at the end of the second quarter the total amount of delinquent loans was still well within reason at 0.5%.

First Look credit unions are expanding their branch network at a healthy pace as the number of branches continues to increase, so to do the figures for office occupancy and operations. This has brought with it the expected growth in employees and is perhaps responsible for the posted growth in membership, which is up both from last quarter and from second quarter last year. It should also be noted however that these figures represent credit unions with a larger asset base, which have a tendency to grow their branches faster than the industry averages.

One of the first items that people look at when new data is released is the net interest margin. Net interest margin marked a slight up-tick for the second quarter of 2007 from 2.45% to 2.49%, a good sign for a measure that has been tightening consistently for the last few years. In a related measure, dividends were also up almost $600M for the quarter to $2.1B as credit union total income rose 18.8%.

While the above trends are only currently representative of the 152 credit unions that reported, these trends can still give us some small insight as to what we can expect to see when the rest of the credit union industry data is released in the coming weeks.

 

 

 

Aug. 6, 2007


Comments

 
 
 
  • This information is very good. It would be more helpful for me if it included the same quarter-prior year data also. Keep up the good work! No one can say they aren''t aware of what''s possible for their own Cu if they read your email reports!
    Carolyn Warden, CCUE