Credit unions continued to steal market share from other mortgage lenders, originating 2.5 percent more first lien mortgages in the second quarter than the first and growing 5.6 percent over the same period last year.
First mortgage real estate loans rose to $253.8 billion, up 2.1 percent for the quarter and 5.6 percent year-over-year, the National Credit Union Administration reported yesterday.
Virtually all of the mortgage business was underwritten by larger credit unions, which are responsible for most of the growth during the quarter.
“Although the industry is performing well overall, smaller credit unions continue to face challenges with making loans, generating earnings and attracting members,” said NCUA Board Chairman Debbie Matz. “NCUA is committed to providing assistance and support to ensure the viability of small credit unions so they can continue to serve local communities.”
“The increases in lending, net worth and membership are especially positive signs,”. “The brisk loan growth shows that federally insured credit unions are meeting the needs of more borrowers and putting their assets to productive use. The net worth ratio rose to 10.5 percent, its highest level since 2008. Credit union membership continues to reach a new milestone each quarter.”
Membership in federally insured credit unions reached 95.2 million, a record high, in the second quarter of 2013. Membership grew by 560,670, or 0.6 percent. Nearly 2.1 million Americans have joined a credit union in the last four quarters.
While adding members, the number of federally insured credit unions dipped to 6,681, a drop of 72. The decrease is consistent with recent trends, as most consolidations were voluntary mergers.
Federally insured credit unions reported $613.7 billion in total loans in the second quarter of 2013, an increase of $13.8 billion over the previous quarter.
The industry’s net worth ratio stood at 10.5 percent of assets at the end of the second quarter, up 34 basis points from the end of the second quarter of 2012. The ratio is at its highest level since the fourth quarter of 2008.
Net worth grew 8.3 percent over the previous four quarters, well above the 4.8 percent rise in assets over the same period. Overall net worth climbed 2.0 percent from the first-quarter level, to $111.0 billion. Federally insured credit unions’ total assets grew by $669.3 million in the second quarter, an increase of 0.1 percent from the first quarter. The industry’s loans-to-shares ratio is now 67.5 percent.
The industry remains well-capitalized, with 96.2 percent of all federally insured credit unions reporting a net worth above 7.0 percent. In the prior quarter, 95.8 percent were well-capitalized.
Overall, share and deposit accounts at credit unions declined during the quarter by $464 million to $909.5 billion, but regular shares (savings), money market shares and IRA/Keogh accounts showed slight increases.
The delinquency ratio of federally insured credit unions for the second quarter of 2013 was 1.04 percent.