Oct. savings balances surge: CUNA monthly estimates

December 4, 2015

MADISON, Wis. (12/4/15)--Memberships and loans outstanding continue to rise at credit unions nationwide, but savings balances have been particularly strong of late, according to CUNA’s monthly credit union estimates for October.

Credit union savings balances jumped 1.4% during the month after a tepid 0.2% performance in September.

Oct. Savings

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Share drafts led the growth with a 6.4% increase, while one-year certificates climbed 1.3%, regular shares rose 0.9%, and money market accounts edged up 0.4%.

Memberships, meanwhile, climbed to 105.3 million nationwide.

“That’s more than half a million members since September,” Perc Pineda, CUNA senior economist, told News Now. “For the past 12 months, memberships increased by 4.3%, which is above our 3.9% membership growth forecast for 2015.”

Loan portfolios also continue to trend higher.

Oct. Loans

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Home-equity loans drove loan growth during the month with a 2.3% jump, followed by new-auto loans at 1.1% and used-auto loans at 0.9%.

Adjustable-rate mortgages increased 0.7%, unsecured personal loans rose 0.4% and credit card loans climbed 0.1%. Fixed-rate first mortgages and other mortgage loans fell by 0.2% and 0.4% respectively.

For the 12 months ending in October, loan growth was 10.4%.

“Loan growth at credit unions has been historically strong in the fourth quarter,” Pineda said. “Judging from our October estimate, we can say that 2015 is no different. Loan growth is on track to meet our 11.2% loan growth forecast this year. Home-equity loans led loan growth in October, which indicates homeowners’ confidence and lenders’ sentiment that home values are stable.”

Pineda added that with adjustable-rate mortgages also performing well, there are signs that the housing market will continue to improve, which should have a positive effect on credit union mortgage lending in the months ahead, “all else equal.”

“Auto loans, both new and used, were also strong in October,” Pineda said. “We will continue to see higher loan growth data for November and December and in 2016. Auto demand is tied to jobs, and since January we have been adding 206,000 jobs per month on average. My sense is that the recent momentum in job creation will continue, and that should bring more lending activities in credit unions.”