WASHINGTON–Credit unions are “aggressively building” deposits as the seek to secure funds for their “lending machine,” according to a new analysis by Callahan & Associates.
During the company’s quarterly Trendwatch webinar, Callahan & Associates reported it identified three trends from Q1 2019 credit union performance data, including:
- An 18.2% increase in share certificates drove overall share growth to 5.9%
- Asset quality improved as delinquency dropped to 59 basis points, the lowest rate since before the financial crisis
- The net interest margin rose eight basis points to 3.11, driving ROA up to 0.94% despite a jump in the cost of funds
“Credit unions are on the hunt for deposits to fund solid, well-balanced growth across all sectors of the loan portfolio,” said Alix Patterson, Callahan & Associates’ chief experience officer, in a statement. “Over 30% of this quarter’s near record high share growth came in the form of certificates, pushing the cost of funds up 25 basis points over this time last year.”
Although recent data released by CUNA Mutual as part of its Trends Report showed CU membership growth slowed in Q1, Callahan’s noted credit unions attracted 4.5 million new accounts during the past 12-months, while also driving average relationship balances north of $19,150. Today, over 58% of members have a checking account — another new high for the industry, Callahan’s reported.