Nebraska's credit unions entered 2015 stronger than ever. From a financial standpoint, assets and capital are at their highest levels ever. From a market impact perspective, market share in key products is on the rise. From a member perspective, loan and share balances are growing along with the average member relationship.
Evident in this performance is Nebraska's robust economic environment. A rise in consumer confidence has led to increased spending allowing Nebraska credit unions to outperform their local and national competitors in a variety of measures such as loan growth.
Consumer lending continues to be at the core of Nebraska's credit union activity. Credit unions granted more than $663.5 million in consumer loans during the first three quarters of 2014, up $70.3 million from the same period a year ago.
Nebraska credit unions posted higher year over year loan growth in every category, but the majority of the increase came in auto originations.
New and used auto loans grew 10.7% and 9.8%, respectively. In aggregate, Nebraska credit unions' overall auto loan portfolio increased $113.7 million, up 10.1% over the same period last year. Nebraska credit unions hold 47.4% of their loan portfolios in autos, compared to just 31.9% nationally.
Credit cards, while just 2.8% of the loan portfolio, gained 7.7%, to hit $72.3 million as consumer spending by Nebraskans continued to increase. The total loan portfolio at Nebraska credit unions expanded 8.9% annually to $2.6 billion. This loan growth is nearly double that of national banks.
With loan growth outpacing share growth by more than six percentage points, Nebraska credit unions' loan-to-share ratio continues to rise. The ratio increased 4.5 percentage points to 80.7%, eclipsing the national average of 74%.
Year-over-year loan growth is also a contributing factor to the rise in net income at Nebraska's credit unions. Net income rose 24.1% significantly higher than the 8.7% growth posted by credit unions nationwide.
Rising interest rates and a growing loan portfolio has resulted in expanding margins at credit unions. Nebraska credit unions realized a net interest margin of 3.09%, up four basis points from a year ago and 24 basis points higher than the national average of 2.85%. Net interest margins in the state have consistently trended higher than the national average since the early 2000s.
Nebraska credit unions are extremely proud of the numbers and strong readings they have been able to post during the past year, but success isn't always measured solely by statistics. They continue to thrive in large part due to their willingness and ability to listen and respond to their members' needs and wants, a testament to the advantage and value of the cooperative model.
J. Scott Sullivan is president/CEO of the Nebraska Credit Union League. He can be reached at 1-800-950-4455 or [email protected].
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