trending Market Intelligence /marketintelligence/en/news-insights/trending/u7klexaw33ucjqqeav0z6a2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Weekly Recap — Navy FCU's rapid growth continues while the smallest CUs vanish

Banking Essentials Newsletter December Edition Part 2

Banking Essentials Newsletter - November Edition

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


Weekly Recap — Navy FCU's rapid growth continues while the smallest CUs vanish

The weekly recap features news on regulatory actions, mergers and other issues facing the credit union space. Send tips, ideas and chatter to ken.mccarthy@spglobal.com.

In the spotlight

* Sometime in 2019, the credit union industry will likely see its first $100 billion institution. Navy FCU's assets totaled $89.80 billion at the end of the first quarter of 2018, up from just $55.50 billion at the end of 2013. The Vienna, Va.-based institution added 776,111 members during the past four quarters — more than the total membership of all but six other U.S. credit unions. That increase brought its total membership to 7.8 million, which is more than the next five largest credit unions combined.

The smallest credit unions continue vanishing from the financial services scene and are reducing the total number of credit unions in the U.S. There were 5,646 operating credit unions in the U.S. at the end of the first quarter of 2018. That number was 5,859 a year earlier. The credit union industry lost a net 688 institutions nationally since the first quarter of 2015. The average asset size of the credit unions that disappeared between March 31 and June 7 was $16.3 million, a study by S&P Global Market Intelligence found. That is the lowest that mark has been in more than a decade.

* U.S. credit unions continue to expand their business lending portfolios. At the end of the first quarter of 2018, U.S. credit unions had $71.73 billion in member business loans outstanding. That represented 14.3% year-over-year growth.

One of the institutions showing strong growth lately is Alabama CU. The Tuscaloosa, Ala.-based credit union had $48.8 million in member business loans at the close of the first quarter. That represented 19.4% year-over-year growth.

In an interview, President Stephen Swofford said that although Alabama CU's member business loan portfolio is expanding, it is still only 10% of total loans and 5% of total assets. "Our philosophy is to grow this portfolio slowly and conservatively, with a large concentration of owner-occupied real estate," he said.

Alabama CU also does some lending for commercial vehicles — for logging, transport, etc. — and dabbles in rental properties, Swofford said. The average member business loan, or MBL, is in the $150,000 to $200,000 range, but the company has a couple of loans above $3 million. Swofford said the credit union believes there is room to grow its commercial portfolio, but it will not deviate from its plan to do so conservatively.

"Interestingly, since it has been suggested by the banks that credit unions do not have the expertise to make MBLs, we've never had a delinquency or charge-off in the over 10 years we've been making such loans," he said.

In other news

* U.S. credit unions have been buying banks this year at a pace that could ultimately more than double the total number of such deals announced in 2017. There have been six such deals announced in 2018 in which a credit union is buying a bank. That is the same number of credit union-buying-bank deals announced in all of 2017, although one of those was later terminated. "I don't think 10 to 15 deal announcements [of this kind] this year is crazy at all," said Dennis Holthaus, managing director at Skyway Capital Markets.

* President Donald Trump intends to nominate Kathy Kraninger, an associate director at the Office of Management and Budget, to be director of the Consumer Financial Protection Bureau. If nominated and approved by the Senate, Kraninger would succeed Mick Mulvaney, the head of the Office of Management and Budget who has been interim CFPB director since November 2017.

* Clean Energy FCU, which received one of four new federal credit union charters handed out in 2017, announced June 12 that it has officially launched and is now taking savings account deposits and making clean energy loans. The Boulder, Colo.-based institution is an online-only company that focuses exclusively on providing loans that help people throughout the U.S. afford clean energy products and services such as solar electric systems, electric vehicles, home energy efficiency retrofits, electric-assisted bicycles and net-zero-energy homes.