June 03, 2014

CU loans, membership soar in 1Q, 5300 data show

June 4, 2014 – First-quarter call report data released by NCUA on Tuesday show that credit unions, with membership increasing by more than 830,000, continue to set the standard for value and member service, said NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt.

"The first-quarter data shows credit unions continue to meet the high standards of value and exceptional member service that people want in their financial institutions," said Hunt.

"Moreover, credit unions continue to be a vital source of credit in helping small businesses expand and promote job growth on Main Street. We want to see these trends continue and believe a key step toward ensuring a sustained recovery is for NCUA to withdraw its proposed risk-based capital rule."

The first-quarter data released by NCUA show the following trends at federally insured credit unions:

  • Credit union membership was up more than 2.5 million, year over year. For the first quarter of 2014, credit union membership increased by 831,635 – reaching a new high of 97.1 million.
  • Lending continued to grow, with total loans increasing 1.2 percent for the first quarter and 8.8 percent, year over year, to $653 billion.
  • Member business lending grew 2.9 percent for the quarter and 11.1 percent since March 2013.
  • Deposits (shares) grew by 3.6 percent during the first quarter to $943 billion from $910 billion, with the loan-to-share ratio decreasing 1.7 percentage points from December.
  • Assets increased 3.4 percent to $1.1 trillion, up from $1.06 trillion in 2013.
  • Net worth increased 1.8 percent to $116.6 billion, up from $114.5 billion.

Within overall loan growth, new- and used-auto loans increased 13.9 and 11.3 percent, respectively, versus the first quarter of 2013. Delinquency and charge-off ratios declined from March 2013 – the former from 1.02 percent to 0.81 percent, and the latter from 61 to 50 basis points. The report also said credit unions continue to be largely well-capitalized, with 96 percent reporting a net worth at or above the required 7 percent, which is up one percentage point from a year before.

Regarding investments, NCUA, in its announcement, said the data show credit unions continued to add long-term investments that could pose added interest-rate risk, but that is based on year-over-year data. During the first three months of the year, credit unions "made noticeable cuts in long-term investments and replaced them with investments having maturities of less than one year," said Curt Long, NAFCU's senior staff economist.

Long said the share of investments with maturities of greater than five years dropped 0.6 percent in the first quarter, while the share of investments with maturities under one year increased 2.4 percent.