Credit Unions Turn Out Strong Performance In A Changing Environment

The nation’s 6,753 credit unions posted strong financials in the third quarter, making loans at a record pace and briskly growing membership.
Andrew Bolton

Credit unions across the country reported solid financials in the third quarter of 2013, according to 5300 Call Report data analyzed by Callahan Associates. Credit unions are on pace for another record year of lending. In the first nine months of 2013, they lent more than $270 billion. This is nearly $26 billion more an increase of 10.6% than the amount lent during the same time period in 2012.

First mortgage and consumer loans i.e., auto, credit cards, and personal loans primarily drove this growth with increases of 8.7% and 10.5%, respectively. Small business loans also posted an increase of $2.1 billion over September 2012.

Data As of Sept. 30, 2013
Callahan Associates |


Source: Callahan Associates’ Peer-to-Peer Analytics

In addition to lending, credit unions also posted strong growth in deposits. Total shares increased 4.1% annually to nearly $918 billion as of September 30. Core deposits led the way with regular shares posting 9.0% annual growth. Checking accounts, typically an indicator of a consumer’s primary financial institution, increased $7.8 billion from the previous September. Checking account penetration is now up to 52.3%.

Increases in other operating income, which includes gains on mortgage sales to the secondary market, contributed to the 4.7% growth in total non-interest income. However, that was not enough to offset declining interest income, and total revenue declined slightly from the first nine months of 2012.

Improved asset quality led credit unions to reduce their provision for loan losses by nearly a quarter, down to $2.04 billion from $2.66 billion in the first nine months of 2012, which provided a boost to the bottom line.

More than two million people nationwide joined a credit union between September 2012 and September 2013, and member relationships have increased as members deepen their ties with their local financial cooperatives. The average loan balance increased 1.0% from the previous September to $12,803, while the average share balance increased 2.0% to $9,449. Members opened nearly 940,000 credit union credit card accounts during the past 12 months, pushing credit card penetration from 15.0% in September 2012 to 15.6% in September 2013.

If credit unions sustained their strong performance in lending and deposits throughout the fourth quarter, then 2013 will be one of their best years ever. Such positive momentum should help credit unions succeed in 2014 and the years beyond.

December 13, 2013

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