Follow The Golden Brick Road

The story behind Golden 1 Credit Union's 35.5% auto loan growth.

 
 

First quarter 2017 reveals that the past 12 months have been especially kind to Golden 1 Credit Union, ($11.1B, Sacramento, CA).

Golden 1 has increased its assets from $10.1 billion to $11.1 billion, saw its loan-to-share ratio increase from 68.2% to 78.1%, but most impressively, Golden 1 CU saw 35.5% growth in its auto loan portfolio.

The big California credit union enjoyed greater than 30% growth in its auto loan portfolio for each of the past four quarters and has realized double-digit growth every quarter since 3Q 2013. During that time, its auto loan portfolio expanded from $1.4 billion to $4.0 billion.

According to AutoCount Data from Experian Automotive, Golden 1 had twice as many car financings as any other any other credit union in California in January, and was the 13th most prolific car financer in California overall, with 4,830 total deals. Golden 1 had a higher number of new car loans than any other credit union had total car financings in January, and nearly as many in February.

Over the past decade, Golden 1, like many of the nation’s credit unions, has seen the strength of its auto portfolio swing between new and used auto concentrations. In 1Q 2007, 60.0% of its auto loan portfolio consisted of new auto loans. With the ensuing financial crises and the resultant tightening of credit and reluctance to purchase new autos, used auto reached 68.3% of the credit union’s auto loan portfolio in 2012.

After the peak of used auto in 2012, Golden 1 has slowly rebuilt its new auto loan portfolio to the 58.1% figure it currently stands at now. The first quarter of 2017 saw the first instance of a decline in new auto concentration since 2012, with the current 58.1% figure 50 basis points lower than 4Q 2016’s 58.6%. In February, used auto saw a higher share of financings for the Golden 1 auto loan portfolio.

That sharp increase in overall auto lending has had a similar effect on Golden 1’s loan-to-share ratio. For the first quarter of 2013, Golden 1 reported a loan-to-share ratio of 49.4%, a level that would be in the 38th percentile of all credit unions at the time. In 4Q 2016, Golden 1 was in the 74th percentile for loan-to-share, at 79.4%. This quarter, Golden 1 is reporting a loan-to-share ratio of 78.1%, a slight decline that’s the first since 1Q 2013.

Golden 1 has continued its lending momentum into 2017 and even with that strong growth, its auto loan delinquency of 0.22% is 26 basis points lower than the national average. Share growth also was 111 basis points above the average for all credit unions in the first three months of 2017.

 
 

May 8, 2017


Comments

 
 
 
  • That's impressive loan growth. I'd be interested to learn the approach used to grow the portfolio. Is it a step-wise increase in dollars spent to promote, focus on sales conversion, increased cross-sell marketing, branch growth / market share capture, some combination, or something else? Thanks.
    Anonymous
     
     
     
  • Great idea to dig deeper! Thanks!
    Greg Gonsalves