Both lending and memberships grew in April, continuing a strong performance for credit unions in 2017, according to CUNA’s Monthly Credit Union Estimates.
Loans increase 0.9% in April--10.8% annualized—matching the 0.9% increase in March. “Healthy labor markets are fueling personal income gains, boosting confidence and translating into solid increases in retail sales and housing purchases,” said CUNA Senior Economist Mike Schenk. “On a year-over-year basis credit union loans are up 11.8% - an acceleration compared to the 10.5% full-year 2016 result.”
Used autos also increased dramatically, gaining 1.5% in the month, an 18% annualized pace. Home equity credit lines/second mortgages balances increased 1.8%.
“Home prices are up roughly 6% in the past year and are expected to continue to reflect gains in the coming months--so more members will see growing equity and credit unions, by extension, should see continued relatively strong gains in the home equity/second mortgage arena,” Schenk said.
Credit unions added nearly 433,000 memberships in March--a 0.4% monthly increase, which nearly matched the percentage gain we reported in April. On a year-over-year basis memberships are up 4.5%, a bit faster than the annual 4.1% increase reported for 2016.
“While indirect loan payoffs may pose challenges to maintaining these lofty results, CUNA economists expect solid growth throughout the remainder of the year,” Schenk said.
Credit union savings balances declined 0.2% in April. One-year certificates led savings growth, rising 0.6, followed by share drafts (0.4%), individual retirement accounts (0.2%) and money-market accounts (0.1%).
The loan-to-savings ratio increased to 79.3% in April from 78.5% in March.
The movement’s overall capital-to-asset ratio remained at 10.4% during April.