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Credit union lending rebounds and membership metrics remain strong in the third quarter

WASHINGTON, DC (November 19, 2019) — Credit unions grew both sides of the balance sheet in the third quarter of 2019.

These trends and more were highlighted in last week’s Trendwatch, a quarterly webinar from Callahan & Associates that highlights industry performance, shares credit union success stories, and identifies areas of opportunity. Callahan’s early data program allows us to share industry trends three weeks before the data is officially released from the NCUA.

Using 99% of the industry’s assets reporting, Callahan analysts identified three standout trends from third quarter credit union performance data:

After a slow start to 2019, credit union loan production reached a quarterly high, originating $151.1 billion in loans in the third quarter alone. The increase was due to an uptick in real estate originations, which rose 12.1% year-over-year.
The loan-to-share ratio fell year-over-year for the first time in six years as credit unions address liquidity pressures and members take advantage of lagging deposit repricing.
The industry’s net interest margin grew 7 basis points and is just 1 basis point below the operating expense ratio.

“Third quarter trends are strong in an uncertain environment and give us a springboard for future growth and opportunity,” said Jon Jeffreys, Callahan president and CEO. “There were 4.4 million net new credit union members over the past 12 months. And although the growth rate is slowing a little bit, membership has grown nearly 21% over the past five years. Additionally, average member relationship continues to increase as members, new and old, develop and expand their credit union relationships.”

Share draft penetration is at an all-time high, up 4.9 percentage points over the past five years to 58.6% as of September 2019. Over the past year, almost 80% of new members opened a checking account with their credit union, signaling that more members are using credit unions as their primary financial institution.

This quarter’s Trendwatch webinar featured a presentation from Andrea Mosher, SVP of Lending at Lake Trust Credit Union ($1.9B, Brighton, MI). The Michigan-based cooperative helps small-business owners achieve their dreams through microlending and providing small loans and assistance to those owners. Read more about Lake Trust’s microlending program in Lake Trust Builds Big Dreams With Microloans on CreditUnions.com.

Every quarter, Callahan leaders rely on the company’s propriety data analytics tool, Peer-to-Peer, to analyze credit union performance data weeks before the official release from the industry regulator. To learn what Peer can do for you, click here.

To learn more about third quarter data trends, contact Callahan at support@callahan.com or visit CreditUnions.com for commentary and industry insights.

About Callahan & Associates

For nearly 40 years, Callahan & Associates has been instrumental in guiding credit union leaders to make informed strategic decisions to ensure their long-term relevance. They accomplish this by helping credit unions measure performance, identify strategic opportunities, and build collaborative networks, all through a mission-focused lens. Learn more at www.callahan.com.