Lending rebounding at credit unions, midyear numbers from regulator show; memberships exceed 118 million

Lending at federally insured credit unions was undergoing a rebound at midyear after experiencing a broad slowdown during the first three months of the year, according to second-quarter numbers released Wednesday by the federal credit union regulator.

The National Credit Union Administration (NCUA) reported that the nation’s 5,308 federally insured credit unions saw mixed lending results during the first half of the year. The NCUA figures show that, while overall loans outstanding increased at an annual rate of 4.3%, loans outstanding for real estate had declined by an annual rate of 7.6% (from $173.3 billion to $166.7 billion).

Loans outstanding for fixed-rate first mortgages also declined during the first half, but at a slower annual rate (by 2%).

Commercial loans outstanding at the credit unions, the NCUA numbers show, declined at an annual rate of 8% (to $24 billion from $25 billion) from the end of last year.

There are signs, however, that lending at credit unions is on the path to grow, as much of the decline in real estate and commercial loans outstanding occurred in the first quarter of the year but gained strength in the second quarter. For example, at the end of the first quarter, total real estate loans outstanding at the credit unions was $132.9 billion – down 23% from year’s end. In the second quarter, real estate loans outstanding expanded by $33.8 billion, wiping out a big chunk of the decline in the first quarter.

Meanwhile, payday alternative loans, the agency’s numbers showed, expanded in the first half of the year by more than 23% to $160.3 billion (from $143.4 billion at year-end 2018).

Overall, the credit union loans-to-shares ratio remains tight at 83.3% (loosened slightly from the end of last year, when it stood at 85.6%).

In other results at midyear, NCUA reported:

  • Memberships at federally insured credit unions reached 118.3 million at midyear, rising at an annual rate of nearly 4%.
  • The credit unions increased their assets to more than $1.5 trillion, expanding at an annualized rate of 9.2% since the end of last year.
  • Return on average assets (ROAA) at the credit unions, the agency said, was 97 basis points (bp), up slightly from the end of last year (when ROAA was 92 bp). However, the overall net worth ratio for the credit unions dropped at midyear to 11.27, down slightly (3 bp) from year-end 2018.
  • The number of federally insured credit unions in the first half of the year declined by 67.

NCUA quarterly data summary, June 2019

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