As Credit Unions expand into commercial lending, CEIS’ commercial loan review services have become an essential part of their portfolio management. Recently, the National Credit Union Administration (NCUA) has reported its analysis of first quarter 2014 results, and they reported that member business loan balances rose 11.1% to $47.3 billion from the previous year same quarter.
A particular item of interest is that the NCUA states that there continues to be a consolidation of smaller credit unions, similarly as we have witnessed with banks. Conversely, membership in federally insured credit unions increased to a new high of 97.1 million. (National Credit Union Administration, 2014).
Other notable positives observed when compared to first quarter of 2013 include: decline of delinquencies and net-charge offs; total asset growth increase of $42.6 billion (4%); deposits in regular shares and share drafts grew; net worth is 31 basis points higher. (National Credit Union Administration, 2014)
While there is positive news, there are concerns about risks per type of investments being made. Investments with maturities of three years or less declined, while investments with maturities over three years have increased. As interest rates rise, the risk to these long-term investments also rises. In spite of the continued growth of deposits and assets, the rate is lower than the previous year. The pace of mortgage originations dropped as a reflection of the slowdown in the housing market. (National Credit Union Administration, 2014)
For additional information from the NCUA’s analysis.