Balance Sheet Growth Remains Strong in the Second Quarter

Preliminary second quarter data shows credit union asset growth increasing thanks to strong quarterly performance in the share portfolio.

 
 

Balance Sheet Growth Remains Strong in the Second Quarter

Credit union balance sheet growth has picked up again in the second quarter, according to data from Callahan & Associates First Look program. This program, which allows credit unions to submit their second quarter call report data in advance of the official NCUA release, currently represents credit unions with $231.0 billion in assets, or approximately 27% of the total industry.

Asset Growth Rates Increases in 2Q

Total assets for the First Look credit unions increased at an annual rate of 10.5% through June. This growth rate is moving at a slightly faster pace than the 10.4% growth these credit unions reported in the first quarter. Despite the double-digit growth reported in this metric as of June, quarterly asset growth for these First Look credit unions slowed to 1.7% from the 5.7% reported in the first quarter.

The major driver of this growth in the balance sheet has been the strong increase reported in the share portfolio. Share balances for these credit unions increased 10.3% over the past year as the personal savings rate continues to increase. As expected, seasonality in the share portfolio has slowed quarterly growth in the second quarter to 1.4% from 6.5% in the first quarter. However, we can still see the trends in share growth picking up as the 1.4% quarterly growth in the second quarter represents a faster pace than the 1.2% quarterly growth rate reported in the second quarter of 2008.

Quarterly Share Growth Picks up Compared to 2008

Seasonality resulted in quarterly growth rates for all components of the share portfolio slowing the second quarter of 2009. However, the trends become more interesting if we compare the growth rates these First Look credit unions reported in the second quarter of 2009, to the quarterly growth rates reported during the same period 2008.

Quarterly Growth by Share Portfolio Component

Data as of June 30 for all First Look Credit Unions

 

Quarterly Growth – 2Q09

Quarterly Growth – 2Q08

Total Shares

1.44%

1.24%

Regular Shares

3.13%

2.48%

Share Drafts

0.05%

-0.11%

Money Market

5.33%

5.84%

Share Certificates

-1.51%

-2.11%

IRA & Keogh

3.52%

2.51%

Nearly all of the share categories reported a faster growth rate in the second quarter of 2009 than they did in the previous year. The only category to see a slowdown in growth over the past year was money market shares, which remains the fastest growing component of the share portfolio. Even share certificates, the only category to report declining balances in the second quarter, saw that rate of decline slow as compared to the previous year. Despite these caveats, the rest of the credit union share portfolio continued to grow at a strong pace over the past three months as credit unions offer competitive rates and a wide array of savings products.

Looking Ahead

The credit union system continues to display its viability and strength heading into the second half of 2009. As the personal savings rate continued to increase, credit unions saw share balances growing at a healthy pace during the second quarter. This increase in share balances has helped credit unions continue to fund loans that meet the needs of their members during this period of financial difficulty, thus leading to strong growth in credit union asset totals in the second quarter. Be sure to check back with CreditUnions.com next Monday, August 3rd, for an in-depth look at the credit union loan portfolio in the second quarter.

If you would like to become a part of our First Look program, please email your credit union's 5300 xml file to 5300@creditunions.com.

 

 

 

July 27, 2009


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