Credit Union Industry At-A-Glance (2Q18)

The total number of credit unions dropped by 50 in the second quarter, and membership expanded 4.3%, the equivalent of 4.7 million new members. What else happened in the second quarter?

Top-Level Takeaways

  • The total number of credit unions dropped by 50 in the second quarter.
  • Nationally, 97.6% of the industry met the NCUA’s 7.0% well-capitalized threshold.
  • Membership expanded 4.3%, the equivalent of 4.7 million new members.

There were 3,444 federally chartered and 2,152 state-chartered credit unions as of June 30, 2018. The total number of actively operating credit unions 5,596 was 50 fewer than as of March 31. On an annual basis, the number of institutions declined by 219, which is in line with recent consolidation trends.

Aggregate assets for the industry expanded 5.8%, or $79.5 billion, from the second quarter of 2017. Outstanding loan balances increased 9.7% year-over-year and surpassed $1.0 trillion for the first time on record. The average loan balance for the industry was $15,229 as of June 30; that’s up 4.1% from $14,624 one year ago. Investment and cash balances declined 3.8% year-over-year as credit unions allowed investments to roll-off to fund a continued robust loan demand that is fueled by elevated consumer confidence and a growing economy.

From a deposit perspective, total shares increased 5.4%, or $62.6 billion, annually. This is down from the 5.6% growth the industry recorded in the first quarter of the year and significantly lower than the 8.1% growth recorded one year ago. As the economy churns along, consumers are increasingly shirking savings products and opting for higher yielding returns in the stock market.



© Callahan & Associates |
Data As Of 06.30.18 12-Month Growth (2Q18) 12-Month Growth (2Q17)
Assets $1.4T 5.8% 7.6%
Loans $1.0B 9.7% 10.8%
Shares $1.2T 5.4% 8.1%
Investments $359.6B -3.8% 1.7%
Capital $162.6B 6.4% 5.7%
Members 115.4M 4.3% 4.3%

Balance sheet growth for credit unions remained strong even as investment and cash balances declined as credit unions rolled-off investments to fund the robust loan demand.

The growth differential between loan and share balances pushed the loan-to-share ratio to 82.9% in the second quarter of the year. That’s up almost 3.3 percentage points from one year ago and is approaching the 83.1% high hit in the fourth quarter of 2008.

Revenue dynamics remained strong across the industry. Total operating income was up 13.1% annually, and the increases in the federal funds rate began to impact credit unions’ income statements as repriced loans translated to widening loan yields and growth in interest income.

Net income for the industry grew 24.5% on a year-over-year basis, and the average ROA was up 13 basis points from one year ago to 0.90% as of June 30, 2018. Net income gains translated to higher capital levels at credit unions across the country as total net worth grew 7.9% to $159.3 billion. The average net worth ratio for the industry has increased 22 basis points over the past 12 months to 11.0% as of June 30. Nationally, 97.6% of the industry met the NCUA’s 7.0% well-capitalized threshold at midyear.

Integral to this growth is an expanding member base. In the past 12 months, membership at U.S. credit unions expanded 4.3%. This equates to more than 4.7 million new members and marks the eighth consecutive quarter of member growth higher than 4.0%.

Wait, There’s More!

This is just one section of the industry trends discussion that appears in Credit Union Strategy & Performance. Read the whole discussion today.

October 22, 2018

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