Lending and membership growth led continued strong credit union performance in May, according to CUNA’s Monthly Credit Union Estimates.
Credit union loans outstanding grew 1% for the month—12.5% on an annual basis.
Total credit union memberships increased 0.4% to 107.2 million. “That’s 431,000 more members than in April,” said CUNA Senior Economist Perc Pineda.
Used auto-loans led loan growth, rising 1.3%, followed by new-auto loans and credit-card loans (both rising 1.2%) adjustable-rate mortgages and home equity loans (both up 1%), (unsecured personal loans (0.8%), other mortgage loans (0.2%), and fixed-rate first mortgages (0.05%).
“We expect auto loan lending to remain healthy for the rest of the year,” Pineda said, who also noted there are no signs of slowing in mortgage lending.
“Both adjustable and fixed mortgage loans increased 10.8% and 7.7%, respectively from a year ago and we expect it will continue in the positive territory given that mortgage rates will most likely remain low for some time and U.S. economic fundamentals remain stable,” he said.
Credit union savings balances declined 0.5% in May, compared with a 0.9% increase in April. Money market accounts led savings growth, rising 0.8%, followed by individual retirement accounts (0.3%), and one-year certificates (0.1%). On the decline during the month were share drafts (-2%) and regular shares (-1.2%).
“If you look the revisions to our credit union forecasts in June (link), we have revised our savings, loan, assets, and membership growth upward for this year,” Pineda said. “And based on our monthly estimates, we are confident that the numbers are on track meeting our forecast.”
The loan-to-savings ratio increased to 77.6% in May from 76.5% in April. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) decreased to 16.3% in May from 17.4% in April.
The movement’s overall capital-to-asset ratio increased to 10.6% in May from 10.5% in April. The total dollar amount of capital grew 0.4% to $135.7 billion.
Credit unions’ 60-plus day delinquency remained at 0.7% in May.