3 Takeaways From Trendwatch 1Q 2017

Shares, loans, and full-time employee growth. How did credit unions perform in first quarter?

 
 

Credit unions post their highest first quarter share growth since 2003 while notching their highest first mortgage origination market share on record, according to first quarter data from Callahan & Associates.

This week, Callahan hosted its quarterly Trendwatch webinar, an event that recaps the industry’s performance trends over the past three months while highlighting credit union success stories and other areas of opportunity.

Here are three Trendwatch takeaways:

No. 1 Credit Unions Start The Year Right

At first quarter, the credit union share growth rate of 8.6% represents its highest first quarter rate since 2003.

Share balances grew by $91.2 billion year-over-year, with most of this growth coming from core deposits, which expanded 10.1%. In terms of dollar amount growth, regular shares increased $35.7 billion, or 9.5%. Share drafts grew $23.2 billion, or 14.8%, and money market accounts grew $19.1 billion, or 7.9%.

In fact, the core deposits share of the entire credit union deposit portfolio has increased more than 13 percentage points since 2008. At first quarter, core deposits represent 75% of the overall portfolio, compared to 62.3% at first quarter 2008.

On a state level, quarterly share growth was positive across all 50 states, while Arizona led the way with 5.3% growth. And while members are increasingly using credit unions as their depository institution of choice, they are also depositing more of their funds with credit unions. At first quarter, the average share balance increased 3.1% from fourth quarter 2016.

No. 2: First Quarter Marks The 11th Consecutive Quarter Of Double Digit Loan Growth

At first quarter, the credit union industry’s 10.9% loan growth represents the 11th consecutive quarter of double-digit loan growth. Total loan balances are nearing $900 billion.

One of the major growth drivers on this side of the balance sheet has been first mortgages. At first quarter, first mortgage originations are up 15.9% year-over-year. That’s a huge jump when compared to first quarter 2016, when the year-over-year growth rate was just 2.0%.

In addition, first mortgage origination market share now sits at 8.6%, a one percentage point increase from first quarter 2016. That 8.6% represents the highest market share on record.

Also of note, member business loans continue to surge. At first quarter, member business loan originations grew 29.2% year-over-year, marking the sixth consecutive quarter of double-digit growth.

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No. 3: Credit Unions Add To Full-Time Employee Ranks

At first quarter, credit unions count nearly 110 million members. Annual membership growth hit 4.4%, doubling the rate seen five years ago.

At the same time, as memberships increase, credit unions have continued to staff up to keep pace.

Year-over-year employee growth hit 2.6% at first quarter, as credit unions gained approximately 9,000 full-time employees since first quarter 2016. Interestingly, however, total part-time employees continue to decline, from 29,000 in first quarter 2016 to 27,000 in the current quarter.

Generally, full-time employees garner higher wages and larger benefit packages. And, although the gap has narrowed, credit union wage growth continues to outperform the national average. At first quarter, credit unions grew wages, on average, by 3.6%, while the national average was a close 3.5%.

 
 

May 24, 2017


Comments

 
 
 
  • An interesting quick look at industry performance data. Thank you for this quarterly insight.
    Anonymous