3Q data analysis: Credit union industry membership growth reaches record high; Market share increases in all major loan products
WASHINGTON, DC (December 12, 2018) — Total membership increased 4.4 percent as 4.9 million more members joined the cooperative movement in the last 12 months according to Callahan & Associates analysis of third quarter data released by the National Credit Union Administration. Credit unions nationwide now serve more than 116 million members.
“The member-focused, not-for-profit model is increasingly attracting people to join credit unions. The value proposition of the cooperative system is further validated by recent trends of members developing wider and deeper relationships with their credit unions in the form of growing wallet share and larger deposit and loan balances,” said Callahan & Associates AVP of Analytics Sam Taft.
With the 35-basis-point acceleration in membership growth year-over-year, credit unions have also increased their average member relationship – a good gauge of retail relationships (excluding business lending) – by $554 to an all-time high of $18,749. The deepening of credit union’s relationships with members can be seen in the increase of average loan balances at a more rapid rate – 3.8% – than that of average share balances – 0.5%.
As of Sept. 30, the net interest margin and the operating expense ratio both increased to 3.12%. For the first time since third quarter 2011, the net interest margin was equal to or greater than the operating expense ratio. This translates to tangible value (earnings) freed up that credit unions can return to members or use as investments to support growth initiatives.
Market share in all major loan segments increased for credit unions over the past year. More than one-fifth of all auto loans originated in the United States are now funded by credit unions. There also was a 30-basis point increase in first mortgage and revolving credit market share, respectively.
Callahan clients are encouraged to use resources such as Peer-to-Peer, CUAnalyzer, and CreditUnions.com to do their own research into third quarter 2018 data sets to uncover the potential pros and cons of indirect for their business models, as well as identify other changing performance trends. For more 3Q data analysis, read takeaways from our Trendwatch webinar or watch the full recording here.
About Callahan & Associates
For more than 35 years, Callahan & Associates has helped credit union leaders identify strategic growth opportunities that
increase member value. We create meaningful dialogue, connect people, provide counsel, and help organizations thrive through
our competitive analytics, best-practice media, leadership consulting, and collaborative ventures. Our clients grow assets,
members, shares, and loans faster than industry averages. Learn more at www.callahan.com.