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Callahan cites impressive consumer lending growth for credit unions in 1Q14
Callahan & Associates’ first-quarter 2014 Trendwatch shows a 10.5 percent increase in year-to-date consumer lending growth.
WASHINGTON, DC (June 02, 2014) — As reported on Callahan & Associates’ first-quarter 2014 Trendwatch webinar, the credit union industry experienced a surge in year-to-date consumer loans through the first three months of 2014, with auto loans being a key contributor to the accelerated growth.
Consumer loans as a whole accounted for $48.1 billion of the $74 billion in total loans originated by America’s credit unions by the end of the first quarter; an increase of 10.5 percent over the year before. This is itself an improvement over the $39.2 billion in loan originations seen in 2012.
Auto loans in particular experienced notable growth due to an influx of both new and used consumer car purchases, making 1Q14 the first time since the recession that auto loans have attained double-digit growth. New auto loans grew at a 14.7 percent rate while used autos loans grew at a 12.1 percent rate. The three states with the highest auto loan balances over this time-frame were Rhode Island, Idaho and Arkansas at 33.8, 23.9 and 21.2 percent, respectively.
In another positive industry development, the increase in consumer loans brought on a 3 basis point increase in net interest margin. This marked the first time since the recession that net interest margin increased year-over-year.
Meanwhile, credit unions’ credit card balances rose at the fastest annual rate in six years to go along with the increase in total credit card accounts, which now number 15.8 million. Overall credit card balances topped $42 billion at the end of the first quarter, resulting in a 7.9 percent annual growth rate.
All in all, the loan growth rate for credit unions is outpacing the share growth rate by more than 5 percentage points – 8.9 to 3.8 percent – and is a sign of members’ increasing confidence in the nation’s economy.
“The growth in consumer lending at credit unions over the past year has been nothing short of impressive. This is a sure sign that members are feeling better about the economy and as that confidence translates into big dollar purchases, they are turning to their credit union to meet their lending needs,” said Jay Johnson, EVP of Callahan & Associates. “It is going to be vital for credit unions to continue to grow their consumer loan portfolios over the coming year as mortgage lending is forecasted to decline through 2015.”
To watch the full-length Trendwatch webinar on demand or to view the presentation slides, please visit CreditUnions.com.
About Callahan & Associates
Callahan & Associates is dedicated to helping the credit union industry thrive. Our team of experts provides leading research, analytics, networking and consulting solutions. More than 4,000 credit unions and industry suppliers rely on us for the latest data, actionable insights and benchmarking tools to develop their unique competitive advantages and achieve their strategic goals. Our nearly 30 year history has enabled us to build an unparalleled knowledge transfer consortium which connects the industry’s best minds. To learn how you can join Callahan’s network, please visit http://www.callahan.com.