ALEXANDRIA, Va. (6/4/14)--Credit union lending and memberships continued to increase in the first quarter of 2014, according to the National Credit Union Administration call report data released Tuesday. The data also showed higher interest rates that slowed mortgage originations.
"The continued growth in credit union lending and gains in membership during the first quarter are positive signs," NCUA Chair Debbie Matz said. "Investing in people and communities will produce dividends for credit unions in many respects, but the higher interest rate environment of late 2013 and the first quarter of 2014 slowed mortgage originations. To protect the (National Credit Union) Share Insurance Fund, NCUA continues to closely monitor the risks posed by rising interest rates, long-term investments and fixed-rate mortgages."
According to the report, federally insured credit unions' total assets grew $42.6 billion, or 4%, from the first quarter of 2013, to reach $1.1 trillion total. Membership in federally insured credit unions grew by 831,635 in the first quarter of 2014, reaching a new high of 97.1 million.
The number of federally insured credit unions fell to 6,491 at the end of the first quarter, a decline of 3.9%, which the NCUA says is consistent with the trend over the last 40 years of consolidation.
The growth in total loans contributed to 69.2% overall loan-to-share ratio, a rise of 3.3 percentage points. This makes it the highest first-quarter ratio since 2010.
First mortgage loans reached $272.6 billion, up 9.7% from the first quarter of 2013, with approximately 61% of those loans fixed rates. However, mortgage originations dropped significantly, with credit unions originating an annualized $42.6 billion in fixed-rate, first real estate loans in the first quarter, down from $102.9 billion in the first quarter of 2013.
According to the NCUA, the decline reflects a reduction in mortgage refinancing activity and is consistent with the slowdown in the housing market during the quarter.
Outstanding loans rose by 8.8% in the first quarter compared with the first quarter of 2013, with notable growth in new auto loans (13.9%), used auto loans (11.3%), net member business loan balances (11.1%) and non-federally guaranteed student loans (26.5%).
The Credit Union National Association's monthly credit union estimates aligned with the NCUA numbers, with loans outstanding increasing 8.9% over the past 12 months. (See related story: Monthly CU survey indicates double-digit loan growth.)
CUNA Senior Economist Steve Rick said the outstanding loan numbers are very promising.
"We've been waiting to see numbers like these since 2009. It means the economy is improving, and uncertainty is on the decline," he said. "Credit union members have more confidence so they're more willing to take out loans."
Other highlights from the report include:
The figures are based on call report data submitted to and compiled by the NCUA for the quarter ending March 31. Also on Tuesday, CUNA released its monthly credit union estimates. See related story: Monthly CU survey indicates double-digit loan growth.
Use the resource link below for more information about the 5300 Call Report quarterly data.