In many respects 2016, was an excellent year for the credit union industry. The activity in the member business lending portfolio proved no exception. Based on the performance of the 5,700 credit unions reporting fourth quarter data, Callahan & Associates projects the credit union industry will set new records in this book of business.
Nationwide, credit unions are on track to hit $60.8 billion in member business loans outstanding in the fourth quarter. This is the highest balance on record. Across a 10-year period, member business loans have more than tripled since reaching $19.9 billion the in the fourth quarter of 2006.
MBL CONCENTRATION ACROSS TOTAL LOANS
FOR U.S. CREDIT UNIONS | DATA AS OF 09.30.16
Source: Callahan & Associates.
Year-over-year, the industry has added nearly $7.9 billion in member business loans and has expanded 14.8% between Dec. 30, 2015, and Dec. 30, 2016. This double-digit growth outpaced that of auto loans (14.2%), student loans (9.2%), and other loans (9.3%) within the credit union loan portfolio.
Member business loan originations also increased significantly — 15.1%, to be exact — over the period. This was faster than first mortgage originations (14.1%), consumer loan originations (11.3%), and other real estate originations (10.1%).
Although the size and volume of member business loans is growing, they accounted for only 6.9% of the total credit union loan portfolio at year-end. However, the average member business loan balances per credit union topped $10.5 million, a 22.0% year-over-year increase.