Credit Union Member Growth Hits 4.0% In Third Quarter

Initial third quarter data shows credit unions are not only adding members but also improving member relationships.

More than 82% of the industry’s assets are reporting third quarter financials in Callahan’s FirstLook program, which provides analysis and access to quarterly 5300 Call Report data nearly a month before NCUA’s official release.

According to preliminary data, credit unions are adding members while posting strong financials throughout the balance sheet and income statement. FirstLook credit union membership grew 4.0% over third quarter 2011, loans grew 5.3%, and share draft penetration which indicates members are using the credit union as their primary financial institution increased 1.7%.

Bank Transfer Day, which occurred on Nov. 5, 2011, helped drive consumers to credit unions. The member growth trend has continued unabated, and FirstLook credit unions are now reporting even stronger member growth than they did last year. FirstLook credit union membership grew 4.0% from September 2011 to September 2012; that’s faster than the 3.5% annual pace they posted in June or the 1.9% pace they posted in the third quarter of 2011.

Data for 2,546 FirstLook Credit Unions As Of September 30
Callahan & Associates |

The influx of new members brought with it growth in core deposits. Both share drafts and regular shares increased at double-digit rates annually, 10.9% and 13.6%, respectively. However,FirstLook credit unions posted gains in not only share draft balances but also share draft penetration. More than half of FirstLook credit union members 52.9% have share drafts. This is a year-over-year increase of 1.7%. Because the presence of a checking account correlates strongly with members using the credit union as their primary financial institution, the increase in share draft penetration bodes well for credit unions. It shows credit unions are building deeper relationships with members gained over the past year.

But credit union success is evident in areas outside of membership and share gains. The 2,546 credit unions that represent FirstLook credit unions posted solid financial performance in many areas this quarter. ROA remains unchanged, 91 basis points, from the second quarter; however, that is a 22-basis-point increase over third quarter 2011. Improved ROA has allowed these credit unions to boost their capital ratio to 11.1%, the highest level since the third quarter of 2008.

FirstLook credit unions also posted yearly gains in their loan portfolio. Annual loan growth reached 5.3%, fueled primarily by the 7.6% growth in first mortgages.New and used auto loans also contributed to the portfolio growth, with used auto loans up 9.2% annually and new auto loans up 7.2%. FirstLook credit unions also posted solid growth in credit cards,6.4%, and business loan, 9.5%.

Data for 2,546 FirstLook Credit Unions As Of September 30
Callahan & Associates |


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Initial data for third quarter 2012 is showing a continued a trend of strong financial performance for credit unions. The cooperative financial services system is not merely bringing in members at a faster pace; it is building deeper relationships with these members as evidenced by a steadily climbing average member relationship. This bodes well for the future performance of credit unions as they differentiate themselves in an ever-crowded financial services marketplace.

Come back to over the next few weeks for updates on the performance of the country’s 7,000 credit unions through Callahan’s FirstLook program.

May 30, 2014

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