PenFed Reports Record Loan Growth as 'Strongest' in Its History
Mortgage originations double and consumer loans rise 40%.
Pentagon Federal Credit Union provided an early indication of the strength of the first quarter of 2021 for credit unions this week, reporting a 49% surge in loan originations.
The credit union based in Tysons, Va., 14 miles west of the U.S. Capitol, was the nation’s fourth-largest credit union in December, based on its assets of $26.7 billion.
As of March 31, it had more than $27 billion in assets and 2.2 million members.
A news release from PenFed Tuesday called the results part of “the strongest quarter in the institution’s 86-year history.” Its total loan originations in the three months ending March 31 were $5.3 billion, up 49% from 2020’s first quarter. The originations were also an improvement from the fourth quarter, when originations rose 44% to $4.4 billion.
“Helping our 2.2 million members do better financially is how we measure success,” President/CEO James Schenck said. “Making $5.3 billion worth of loan originations in the first quarter is the result of PenFed’s value proposition of great rates for everyone, inspired leadership within our mortgage and consumer lending teams, and the dedication to member service of the 3,000 financial professionals who power PenFed forward.”
PenFed originated a record $3 billion in mortgages in the three months ending March 31, up 127% from 2020’s first quarter. In the fourth quarter, it originated $2.6 billion in residential mortgages, up 166.3% from 2019’s fourth quarter.
PenFed’s consumer lending division originated $2.29 billion in auto loans, credit cards, personal loans and refinanced student loans. PenFed said the amount was also a record for the credit union, and 40% higher than consumer loan originations in the first quarter of 2020.
In 2020’s fourth quarter it produced $1.9 billion in non-real estate loans, down 11.8% from 2019’s fourth quarter.
As of March 19, the Mortgage Bankers Association had forecast $1.09 trillion in first-quarter originations, up 94% from 2020’s first quarter.
Mortgage originations have also shown strength in the first quarter among banks, most of which reported results last week.
Retail mortgage originations in the three months that ended March 31 were $103.7 billion for Bank of America of Charlotte, N.C., JPMorgan Chase of New York, U.S. Bank of Minneapolis, Truist of Charlotte, N.C., and Wells Fargo of San Francisco.
The first-quarter originations were up 33% from a year earlier and 5% from the fourth quarter.
The first quarter’s originations were the highest in at least two years for J.P. Morgan Chase and Wells Fargo. Peak production was in 2020’s second or third quarter for BoA, Truist and U.S. Bank.