Credit unions entered the second half of the year strong on a strong note recording solid gains in lending, savings and membership, according to CUNA’s monthly estimates.
Credit union loans outstanding grew 0.9% in July, compared with a 1.1% increase in June. Home equity loans led loan growth, rising 3%, followed by adjustable-rate mortgages and new auto loans (both 1.4%), unsecured personal loans (1.3%), used auto loans (1.1%), and credit card loans (1%). On the decline during the month were fixed-rate first mortgages (-0.3%) and other mortgage loans (-0.4%).
Credit union savings balances increased 0.5% in July, compared with a 0.6% increase in June. Share drafts led savings growth, rising 2%, followed by one-year certificates (0.7%), individual retirement accounts (0.3%), regular shares (0.1%), and money market accounts (0.02%).
Total credit union memberships grew 0.4% during July, the same growth rate as June and July.
“As we entered the second half of the year, our July estimates are all positive,” said CUNA Senior Economist Perc Pineda. “We are confident that savings, loans, assets and membership growth will meet or exceed our forecast this year. In fact, savings are now 7.1% higher than a year ago. Loans are 10.1% higher and assets are 7.4% higher. Memberships are 3.9% higher than a year ago. Based on our estimates, there were 107.6 million credit union members in July.”
Credit unions’ 60-plus day delinquency remained at 0.7% in July.
“Perhaps, credit unions are concerned that they are facing more risks and less opportunities,” Pineda said. “In particular, the question that comes to mind is what aspects of the economic performance will affect credit union operations and the financial conditions of its members?”
The loan-to-savings ratio increased to 78% in July from 77.7% in June. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) increased to 16.5% in July from 16.1% in June.
The movement’s overall capital-to-asset ratio decreased to 10.7% in July from 10.8% in June. The total dollar amount of capital grew 0.7% to $138.6 billion.