WASHINGTON—Credit unions grew both sides of the balance sheet in the third quarter of 2019, according to Callahan & Associates.
As reported during the company’s quarterly webinar, TrendWatch, Callahan’s said data drawn from CUs representing 99% of the industry’s assets identified three standout trends from third quarter, including:
- After a slow start to 2019, credit union loan production reached a quarterly high, originating $151.1 billion in loans in the third quarter alone. The increase was due to an uptick in real estate originations, which rose 12.1% year-over-year.
- The loan-to-share ratio fell year-over-year for the first time in six years as credit unions address liquidity pressures and members take advantage of lagging deposit repricing, Callahan’s said.
- The industry’s net interest margin grew seven basis points and is just one basis point below the operating expense ratio.
“Third quarter trends are strong in an uncertain environment and give us a springboard for future growth and opportunity,” said Jon Jeffreys, Callahan president and CEO. “There were 4.4-million net new credit union members over the past 12 months. And although the growth rate is slowing a little bit, membership has grown nearly 21% over the past five years. Additionally, average member relationship continues to increase as members, new and old, develop and expand their credit union relationships.”
In addition, Callahan’s reported share draft penetration is at an all-time high, up 4.9 percentage points over the past five years to 58.6% as of September 2019. Over the past year, almost 80% of new members opened a checking account with their credit union, signaling that more members are using credit unions as their primary financial institution.