Let the Good Times Roll!

Credit unions broke records in 2010 (and other news you might not be reading elsewhere).


In the final 90 days of 2010, credit unions leveraged their third quarter momentum to post some striking numbers.

Let’s start with a fact shared by my colleagues Jay Johnson and Chip Filson yesterday during Callahan’s quarterly Trendwatch webinar:

  • Credit unions originated the highest fourth quarter volume in their history.

Haven’t heard that yet? It’s true. The industry originated $69 billion in loans during the fourth quarter. That’s a 12% jump from the fourth quarter of 2009!

Approximately one-third of those record-level originations came in through the mortgage portfolio. Credit unions originated $84.5 billion in first mortgage loans over the entire year, which leads to another striking number:

  • Credit unions hit record annual mortgage lending market share levels of 5.4%.

But what about the $8 billion decline in the loan portfolio you’ve likely seen reported? That is the amount credit unions held on the balance sheet. It’s a factual number, but it needs some perspective.

Loans on the balance sheet declined largely because credit unions sold more than half of their first mortgage originations, a total of $44.1 billion, to the secondary market. Why would they do that? For asset and liability management.

Another sore spot you’ve likely seen reported involves new auto lending. This component of the loan portfolio also requires some context. Credit unions aren’t necessarily having trouble making auto loans, rather, they are returning to their “normal” market share level, which has traditionally hovered at approximately 15% of total auto lending. This is a five percentage point drop from the record high of nearly 20% posted in 2009.

Yet another interesting fact I learned during the Trendwatch call:

  • Net income is nearly triple 2009 totals.

Credit unions managed operating expenses and cut provisions for loan losses by 25.9% in 2010, which helped to generate the $4.6 billion in net income in 2010.

I encourage you to join our second showing of Trendwatch today at 11:30 AM Eastern. In addition to the Callahan speakers, we’ll be joined by Mike Patterson of Financial Partners Credit Union and Patrick O’Callaghan of Goldman Sachs. To register, visit www.creditunions.com/trendwatch.