On Wednesday afternoon, Callahan & Associates hosted its quarterly Trendwatch webinar, an analysis of quarterly 5300 Call Report data that contextualizes industry performance and showcases individual credit union strategies.
The review of midyear data brings to light more than a few impressive takeaways; here are three:
(1) The industry posted its highest loan growth rate since 2005.
Year-over-year growth is nearly 10%. Moreover, credit unions posted double-digit growth in four separate components of the loan portfolio: first mortgages, new auto, used auto, and member business lending. Consumer loan originations are up 60% over the first six months of 2013 and up 90% over the first six months of 2012.
"As the economy picks up, members are turning to their credit union for car loans and credit cards more than ever," says Jay Johnson, senior vice president of Callahan & Associates. "Both categories have reached new highs."
(2) The credit union industry is the second largest mortgage lender in the country.
Credit unions are second only to Wells Fargo, and inched out Chase, when it comes to mortgage originations. What’s more, credit unions captured their highest ever market share — 8.4% — in the first six months of 2014. In each of the past four quarters, credit unions have captured a market share of at least 7.5%; that jumped to 9.0% in second quarter 2014.
“We’re seeing a shift in the mortgage market to smaller lenders,” Johnson says. “The largest lenders are pulling back and re-assessing operations while the smaller lenders are demonstrating their flexibility by offering different kinds of products, such as ARMs and non-QM mortgages.”
(3) Thanks largely to loan income, revenue is on the rise for first time since 2009.
Total revenue for the first six months of 2014 is higher than the same period in 2013. The industry’s net interest margin is five basis points higher than it was in 2013 while the loan-to-share ratio is four percentage points higher.
“Credit union dollars are moving away from low-earning investments into higher earning loans,” Johnson says. “The slight rate bump we saw last May means new loans are earning a better rate than they would have one year ago.”
It's not too late to participate. Attend day 2 of Trendwatch to learn more about what's happening in the industry weeks before the official data release. And don't forget, Trendwatch is available on CreditUnions.com for viewers to watch on demand.