Credit Unions Lend $1B per Day to Members in 2013

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Callahan & Associates’ analysis of credit union performance shows lending surging forward in the first half of 2013, resulting in the pace of loan growth surpassing deposit growth for the first time since 2008.

Credit unions continue to build on the momentum developed during the downturn when they were lending to members at a then-record pace during the height of the ‘credit crunch’. - Jay Johnson, Executive Vice President of Callahan & Associates

Callahan & Associates’ analysis of credit union performance shows lending surging forward in the first half of 2013, resulting in the pace of loan growth surpassing deposit growth for the first time since 2008. The $621 billion credit union loan portfolio has expanded by 5.4 percent over the past 12 months, the fastest pace in five years and ahead of the 4.6 percent share growth rate.

Six months into 2013 the credit union industry’s lending activity is on a record pace with $175.1 billion in loans originated, or $1 billion dollars a day. Six states have posted at least a 20 percent increase in loan originations. North Dakota leads the nation with a 37.6 percent increase versus the first half of 2012, followed by Idaho with a 30.1 percent rise.

Consumer lending is a key driver of growth, with over $91 billion in originations through June. New auto loans are the fastest growing component of the industry’s loan portfolio. Supported by surging new car sales, new auto loan balances are up 11.2 percent over the past year. Used auto lending also remains strong as credit unions offer a variety of refinancing programs to help members lower their monthly payments. In addition to the strong auto lending results, credit union credit card balances topped $40 billion for the first time at mid-year.

“Consecutive years of record lending activity are evident in the loan portfolio growth. Every loan category in the portfolio is growing at a faster rate in 2013 than in 2012,” says Jay Johnson, EVP of Callahan & Associates. “Credit unions continue to build on the momentum developed during the downturn when they were lending to members at a then-record pace during the height of the ‘credit crunch’.”

Real estate lending continues to rise at credit unions as well. The $66.1 billion in first mortgage originations is the highest ever through June, helped by a record $34.9 billion in home loans being granted to members during the second quarter. Credit unions originated 6.8 percent of all first mortgages in the U.S. in the first half of 2013. The pace of home equity lending has also picked up with originations increasing 10 percent from year ago levels.

For a full discussion of all of the industry trends and analysis from Callahan’s 2Q13 Trendwatch webinar visit CreditUnions.com the first week of September. You can also view the top trends of 2Q13 on CreditUnions.com on our Industry Overview page.

About Callahan & Associates
Callahan & Associates is an independent voice within the credit union industry providing trusted industry expertise in a comprehensive package allowing credit unions and credit union partners to deliver the best service and products to their audiences.

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Jennifer Rosenbaum
@creditunionscom
since: 05/2009
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