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Strong Loan Growth Marks Q3 CU System Performance
Monday, December 7, 2015 6:45 AM

Loans Up Nearly 11 Percent from Previous Year; Larger Credit Unions Lea​​d Growth

America’s federally insured credit unions continued to expand lending and reduce longer-term investments in the third quarter of 2015, the National Credit Union Administration reported Friday.

“Lending continues to grow, which goes hand-in-hand with the continuing economic recovery,” NCUA Board Chairman Debbie Matz said. “The level of exposure to long-term investments that causes concern about interest-rate risk is declining, although there is still room for improvement. Overall, the third-quarter data indicate the credit union system maintains its soundness while fulfilling its primary mission of providing affordable credit.”

NCUA released the new figures based on Call Report data submitted to and compiled by the agency for the quarter ending Sept. 30, 2015.

Third Quarter Lending Continues Growth Trend 

Total loans at federally insured credit unions reached $769.5 billion in the third quarter of 2015, an increase of 3.3 percent from the previous quarter and 10.7 percent from a year earlier. Over the year ending in the third quarter of 2015, loans grew across all asset sizes and in every major category.

  • New auto loans grew to $96.9 billion, up 4.4 percent from the previous quarter and up 17.6 percent from the third quarter of 2014.
  • Used auto loans increased to $158.6 billion, up 3.7 percent from the previous quarter and up 13.1 percent from the third quarter of 2014.
  • Total first mortgage loans outstanding reached $315.5 billion, up 3.0 percent from the previous quarter and up 10.2 percent from the third quarter of 2014. Fixed-rate first mortgage loans made up 59.0 percent of first mortgage loans outstanding at the end of the third quarter.
  • Other mortgage loans were $73.5 billion, up 1.8 percent from the previous quarter and up 2.8 percent from the third quarter of 2014.
  • Net member business loan balances grew to $56.0 billion, up 3.0 percent from the previous quarter and up 11.4 percent from the third quarter of 2014.
  • Non-federally guaranteed student loans stood at $3.4 billion, up 5.1 percent from the previous quarter and up 11.9 percent from the third quarter of 2014.
  • Payday alternative loans outstanding at federal credit unions were $36.1 million, up 2.7 percent from the previous quarter and up 13.8 percent from the third quarter of 2014.

The loans-to-shares ratio at the end of the third quarter was 77.5 percent, up 2.0 percentage points from the previous quarter and up 3.5 percentage points from the end of the third quarter of 2014.​

Membership Exceeds 102 Million, Consolidation Trends Continue

Membership in federally insured credit unions grew to 102,138,141 at the end of the third quarter of 2015, an increase of 3.4 million from the end of the third quarter of 2014.

The number of federally insured credit unions fell to 6,090 at the end of the third quarter, 260 fewer than at the end of the third quarter of 2014, a decline of 4.1 percent. Consolidation in the financial industry has been a long-running trend.

Credit Union System Further Reduces Long-Term​ Investments

Total investments by federally insured credit unions stood at $270.3 billion at the end of the third quarter, a decline of $18.2 billion, or 6.3 percent, from the end of the third quarter of 2014. Compared to a year earlier, investments declined in all duration categories except those with maturities between one and three years. Investments with maturities of one to three years increased 9.5 percent from a year earlier, to $105.4 billion. Investments with maturities greater than 10 years dropped 25.2 percent from the third quarter of 2014, to $4.5 billion.

The credit union system’s net long-term assets ratio fell to 32.4 percent in the third quarter from 35.0 percent a year ago. Credit unions with less than $10 million in assets had the lowest net long-term asset ratio of any peer group at 11.0 percent. In comparison, credit unions with more than $500 million in assets had a ratio of 33.4 percent.

Credit Unions Report 23 Consecutive Quarters of Positive Net Income

Federally insured credit unions continued to report positive net income in the third quarter, $2.3 billion, a decline of $82 million, or 3.5 percent, from the third quarter of 2014. As a whole, federally insured credit unions have recorded positive net income for 23 straight quarters.

This ongoing trend contributed to a rise in the system’s total net worth. The aggregate net worth ratio reached 10.99 percent at the end of the third quarter, up 6 basis points from a year earlier.

For more information about the performance of federally insured credit unions, NCUA makes the complete details of the Sept. 2015 Call Report available online here​. A summary of third-quarter performance is available here​, and financial trends data for federally insured credit unions are available here​.

Review the entire news release.