Federally-insured credit unions earned greater income from lending than they did from investments during Q1 2015, the NCUA reported Tuesday.
Total loans for the group reached $721.9 billion as of March 31, an increase of 1.3% from the previous quarter and 10.6% from the first quarter of 2014. Credit unions saw growth in almost every major loan category, the agency said.
Leading the pack, total first mortgage loans outstanding reached $297 billion, up 1.6% from the previous quarter and up 8.9% from the first quarter of 2014. Fixed-rate first mortgage loans made up 59.3% of the category.
New auto loans sped to second place, growing to $89.3 billion, a 3.4% increase from the previous quarter and up 21.5% from Q1 2014. Used auto loans increased to $147.3 billion, up 2.5% from the previous quarter and a 13.2% gain from Q1 2014.
Second-mortgage loans topped $71.6 billion, down 0.5% from the previous quarter, but up 2.5% from Q1 2014. Net member business loan balances grew to $52.9 billion, an increase of 2.1% from the previous quarter and up 11.6% from Q1.
Private student loans grew to $3.3 billion, an increase of 4.3% from the previous quarter and up 15.2% from Q1 2014. Payday alternative loans outstanding at federal credit unions totaled $30 million, down 18.2% from the previous quarter, but up 29.9% from Q1 2014.
The overall loan-to-share ratio at the end of the first quarter was 73.3%, a slight decline from the previous quarter, but 4.1% higher than the end of Q1 2014.
By comparison, federally-insured credit unions are moving away from investments. For the period ending March 31, investments totaled $280.4 billion, a 3.7% decline from the end of Q1 2014.
Compared to a year earlier, investments declined in all categories except those with maturities of one to three years, which increased 20% from a year earlier to $107 billion. Investments with maturities greater than 10 years dropped 29% to $5.3 billion compared to Q1 2014, the NCUA said.
"Credit unions are continuing to make the loans needed to grow local economies," NCUA Board Chairman Debbie Matz said. "At the same time, credit unions are curbing long-term investments. The switch from long-term investments to loans is decreasing interest-rate risk, a positive development for the credit union system as a whole."
In addition to lending and investment trends, the NCUA also reported that delinquency and net charge-off ratios for federally-insured credit unions declined to their lowest first-quarter levels in eight years.
The delinquency ratio fell to 69 basis points from 81 basis points at the end of Q1 2014. The net charge-off ratio declined to an annualized 47 basis points year-to-date from 50 basis points at the end of Q1 2014. Loan charge-offs due to bankruptcy totaled 16.9%, 137 basis points below the end of Q1 2014.
In keeping with long-standing financial industry trends, the number of federally-insured credit unions fell 4.4% to 6,206 institutions at the end of Q1, 285 fewer than at the end of Q1 2014. During the same period, however, membership grew to 99,969,794, an increase of more than 2.8 million from the end of Q1 2014.
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