CARSON CITY, Nev.–Nevada’s credit unions could surpass every other state as the number-one loan originator among credit unions nationally during the past quarter compared to the same time one year earlier.
If the trend holds true, the California and Nevada Credit Union Leagues said it’s a “trend that speaks of the deep, years-long financial rebuilding process taking place for residents living in one of the hardest hit regions during and after the Great Recession.”
According to the leagues, quarterly originations, which are sometimes an indicator of future activity, rose 71% to $713 million from September 2014 to September 2015, according to third-quarter “first look” data released by Callahan and Associates for the 10 federally- insured credit unions in Nevada. Most of those loans were in mortgages and autos—two consumer sectors many experts say are “being fueled by rock-bottom interest rates that will soon rise,” the leagues said.
The California and Nevada Credit Union Leagues released a statement by Chief Economist Dwight Johnston in which he said it’s still too early to place Nevada’s latest loan trends into specific context. “However, what’s evident is the continuing storyline of many credit unions finally coming into a full recovery across the state,” he said. “It’s allowed them to particularly be more aggressive in promoting mortgages.”
The leagues noted that in the most recent Callahan data 10 “first look” credit unions represent nearly half of the industry’s assets in Nevada, while another seven privately insured credit unions make up the other half. Call reports for the remainder will be available in the coming weeks.
“It’s possible Nevada will still be number one—or not far off—after all call reports are available,” said Sam Taft, industry analyst for Callahan. His basis is comparing quarterly “first look” originations to what was eventually reported for all credit unions in prior years.
The leagues released a statement from Wally Murray, CEO of Greater Nevada CU and chairman of the Nevada Credit Union League, said consumer confidence has increased across Nevada due to a “vastly improved” labor market, with unemployment falling from 14.5% in 2010 to 6.6% last month. The state’s job growth now ranks in the top three for the country, assisted by a wider variety of job openings.
“We’ve been successful in attracting technology companies, such as Amazon and Tesla,” Murray said. “That’s helped broaden our state’s economic base from its traditional roots in gaming, tourism, and mining, all of which have significantly improved as well over the past three years.”
First mortgages represent 37% of total loans at Nevada credit unions, with used autos at 33% and new autos at 7%, Taft said. The remaining balance is credit cards, home equity loans, other types of consumer loans, and business loans.
According to Nevada data provided by SNL Financial:
- 21 credit unions were operating across the state (17 locally headquartered and four non-local) as of Sept. 30.
- In late 2014, those 17 local credit unions held $3.2 billion in deposits (2.1% of total institution deposits in the state, but 60% of locally headquartered institution deposits).
- 25 banks were operating across the state (six locally headquartered and 19 non-local) as of Sept. 30.
- In late 2014, those six local banks held $2.1 billion in deposits (1.4% of total institution deposits in the state, but 40% of locally headquartered institution deposits).
- In late 2014, non-local banks and non-local credit unions (23 of them) held $146.6 billion in deposits (96.5% of total institution deposits in the state). Most of these deposits were held by out-of-state large and regional banks.