CREDIT UNION TRENDS REPORT CUNA Mutual Group – Economics ● August 2016 (June 2016 Data)

Highlights

 During June, credit unions picked-up 392,000 new memberships, loan balances grew at a 10.1% annualized pace, vacation spending and car purchases reduced savings balances 0.1%, firms hired 292,000 workers, nominal consumer spending increased a modest 0.4%, and long-term interest rates fell 17 basis points. Second quarter economic growth came in at 1.1%, better than the 0.8% in Q1.  At the end of June, CUNA’s monthly estimates reported 6,119 CUs in operation, down 7 CUs from one month earlier. Year-over-year the number of credit unions declined by 278, more than the 274 lost in the 12 months ending in June 2015.  Total credit union assets fell 0.01% in June as credit unions liquidated investments to pay down $8 billion in wholesale borrowings. Assets rose 6.9% over the past year due to a 7.5% increase in deposits and a 7.9% increase in capital despite a 10.7% drop in borrowings.  The nation’s credit unions increased their loan portfolios 1.1% in June, slightly less than the 1.3% pace reported in June 2015, and 10.1% during the last 12 months. June is historically the month reporting the fastest loan growth as the summer car buying season begins in earnest.  Credit union memberships rose a robust 0.37% in June, similar to the 0.38% gain reported in June 2015. Memberships are up 3.9% over the past year due to rapid job creation and strong demand for new and used auto loans.  Credit union loan delinquency rates fell to 0.70% in June, down from 0.74% one year earlier due to a stronger economy and double digit loan growth. As the labor market approaches full employment and the unemployment rate falls, the delinquency rate will decline even further.

ECONOMIC, COMPETITIVE AND INTEREST RATE ENVIRONMENT During June, the economy added 292,000 jobs, the unemployment rate rose to 4.9%, personal income rose 0.2%, personal spending rose 0.4%, consumer prices were unchanged, consumer confidence rose, new home sales rose 3.5%, existing home sales rose 1.1%, auto sales fell 4.5%, home prices rose 1.1%, and the 10-year Treasury interest rate decreased 17 basis points to average 1.64%. The economy expanded at a 1.1% annual pace in the second quarter, according to the Bureau of Economic Analysis, better than the 0.8% pace reported in the first quarter, but lower than the 1.5% CBO estimate of potential GDP growth. Consumer spending led growth at a 2.94% annualized pace, the fastest pace since the fourth quarter of 2014. Real disposable income growth rose to 2.3% from 2.1% in the first quarter. Expect the economy to expand at a 2.7% pace in the third quarter and 2.3% pace in the fourth quarter, pushing the economy close to full employment and potential GDP. This will boost wages, consumer confidence and ultimately keep credit union lending growth strong. Total Lending Credit union loan balances rose 1.1% in June, slower than the 1.3% pace reported in June 2015, due to slower growth in fixed-rate mortgages (1.2% vs 2.4%) and adjusted-rate first mortgages (0.1% vs 0.5). The only lending product still contracting was second mortgage loans (-0.3%) as members continued to roll second mortgage balances into refinanced first mortgages. June is typically the month of the year recording the fastest loan growth with seasonal factors adding 0.42 percentage points to the underlying trend growth. Credit union loan balances were growing at a 10.1% seasonally-adjusted, annualized growth rate in June, (Figure 1), similar to the 2004-2005 credit boom. There are confluences of factors that will drive double digit loan growth through 2016. The most important one is job growth. The economy is expected to add close to 2.5 million jobs in 2016 and 2.3 million in 2017. As the labor market reaches full employment in the second half of 2016, wage growth will accelerate. This will raise consumer confidence back to prerecession highs. Figure 1:

CU Loan Growth Seasonally Adjusted Annualized Growth Rate 14% 14% 13% 13% 12% 12% 11% 11% 10% 10% 9% 9% 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% -1% 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 -1% -2% -2%

Credit Union Consumer Installment Credit (CUCIC) Credit union consumer-installment-credit loan balances (auto, credit card and other unsecured loans) rose 10.9% during the 12 months ending in June, more than twice the 5.3% reported by all other lenders. Revolving credit, mostly credit cards, came in surprisingly strong in June growing at a 10.2% seasonally-adjusted annualized growth rate (Figure 2). June’s seasonal factors usually add 0.59 percentage points to the underlying trend growth rate (Figure 3). Low gas prices had been weighing on credit card growth by reducing the amounts charged on credit cards and increasing the savings available to pay down outstanding debt. Rising consumer confidence is encouraging members to start buying again. Figure 3: Figure 2:

Credit Card Loan Seasonal Factors

CU Credit Card Growth

5.0%

Seasonally Adjusted Annualized Growth Rate 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 -2%

16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2%

4.0% 3.13% 3.0% 2.0% 1.0%

0.59% 0.60% 0.05%

0.85%

0.71%

0.26%

0.0% Jan

Feb

Mar

Apr

May

June

July

Aug

-1.0%

Sept -0.24% Oct Nov -0.48%

Dec

-1.31% -2.0%

-1.95% -2.38%

-3.0% Source: CUNA & NCUA.

Vehicle Loans Credit union used-auto loan balances grew at a 14.4% seasonally-adjusted, annualized growth rate in June, a slight deceleration from the cyclically high pace set during the last couple of months (Figure 4). On a month-over-month basis, used-auto loan balances increased 1.5% in June, faster than the 1.4% reported in June 2015. June’s seasonal factors usually add 0.72 percentage points to the underlying trend growth rate (Figure 5) and are typically the largest of the year. March through August is considered the used-auto buying and lending season. Credit union used-auto loan balances are typically 62% larger than new-auto loan balances, but a typical used-auto loan is originated at roughly half the dollar amount of a new-auto loan. So even though new-auto loan balances increased 15.4% during the last 12 months and used-auto loan balances grew only 14.4%, many credit unions have had to increase staffing in the used-auto lending area to keep up with the surge in used-auto loan demand. Figure 4:

Figure 5:

Used Auto Loan Seasonal Factors

CU Used Loan Growth

1.0%

Seasonally Adjusted Annualized Growth Rate 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 -2%

0.9%

0.72%

0.8%

20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2%

0.7% 0.6% 0.5% 0.4%

0.32%

0.37%

0.35%

0.3%

0.15%

0.13%

0.2% 0.1% 0.0% -0.1%

Jan

Feb

-0.2%

Mar

Apr

May

June

July

Aug -0.01% Sept

Oct Nov -0.11%

Dec

-0.3% -0.4% -0.5%

-0.36%

-0.41%-0.42%

-0.6% -0.7% -0.8% -0.70% -0.9% -1.0% Source: CUNA & NCUA.

Vehicle sales fell in June to a 16.7 million unit seasonally-adjusted, annualized sales rate, which is down from the 17.3 million units reported in May, but above the 16.5 million-level considered to be a strong auto market. A confluence of positive factors will keep new auto sales above the 17 million mark in 2016 and begin to slow slightly in 2017.

2 ● Credit Union Trends Report

st

Real Estate-Secured Lending – 1 Mortgages and Other Real Estate Credit union fixed-rate first mortgage loan balances grew 1.3% in June, slower than the 2.4% reported in June 2015. However, a year-to-date growth comparison shows about the same 8.3% growth rate during the first half of 2015 and 2016. Adjustable-rate first mortgage loan balances grew faster than fixed-rate loans, increasing 11.1% in the first half of the year, but slightly less than the 12.1% reported in the first six months of 2015 (Figure 6). Credit unions now hold $341 billion of first mortgages on their books, which are 3.6% of the entire mortgage market, up from 3.2% in June 2015. The contract interest rate on a 30-year fixed-rate conventional home mortgage fell to 3.57% in June, down from 3.60% in May, and below the 3.98% reported in June 2015. We expect the Federal Reserve to raise short-term interest rates in the second half of 2016, which will lift the 30-year mortgage interest rate to the 3.75-4.0% range by the first half of 2017. This forecasted increase in interest rates will encourage some fence-sitters to purchase a home now before interest rates rise further. Home prices rose 1.1% in June from May, according to the Core Logic Home Price Index, and 5.7% year-over-year. The index is now 44% above the low point in March 2011, and only 6.7% below the peak set in April 2006. Home prices are expected to rise another 5% in 2016 and 4% in 2017. Therefore, home prices should reach new highs by the end of 2017. Existing home sales rose a strong 1.1% in June compared to May and by 3% compared to June 2015. The housing market tightened as first time homebuyers entered the market and purchased 33% of all sales, the highest share in four years. The return of first time homebuyer sales could herald stronger demand for home purchases in coming years. Credit union mortgage lending should increase as improving financial positions among borrowers and rising incomes justify loosening credit standards. In addition, confidence in the housing market will return as the general economy strengthens and lingering memories regarding the most recent housing downturn fade from view. Figure 6:

Figure 7:

CU Surplus Funds (Cash + Investments)

Growth CU Real Estate Loans Percent

2016 = June 75%

40%

73%

38%

70%

36%

68%

34%

5

65%

32%

0

63%

30%

60%

28%

20 14.8

15 10

7.4

8.9 8.4

6.8

5.7

10.411.1

10.1

9.8

9.8

8.2

7.4 7.5 5.8

-0.8

-1.6

-2.5

-5 -7.0 -6.4

-10

58% 55%

13 14 15 16 13 14 15 16 13 14 15 16 13 14 15 16 13 14 15 16 53% All Real Estate Loans

Fixed Rate Mortgages

1st

Adjustable Rate 1st Mortgages

Home Equity Loans

Second Mortgages

26% Recession Surplus Funds-to-Assets (Right Axis)

24% 22%

Loan-to-Asset (Left Axis) 50%

20% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

Surplus Funds (Cash + Investments) Credit union surplus funds as a percent of assets fell to 29.5% in June, down from 31.8% in June 2015, as credit unions partly funded $77.4 billion in new loans during the last year with $2.7 billion of cash and investments (Figure 7). The lion’s share of loans, however, was funded with $75.9 billion in new savings deposits. The strong growth in savings over the last year resulted in credit unions relying less on wholesale borrowings, which declined by $4.7 billion. Credit unions capital balances increased by $10.1 billion during the last 12 months, pushing the credit union movement’s capital-to-asset ratio to 10.8%, slightly above the 10.7% reported in June 2015. The obverse of the falling surplus funds ratio is the rising loan-to-asset ratio, which reached 66% in June, the highest level since April 2009. Credit unions can expect rising asset yields over the next year as more and more funds are moved from the investment portfolio into new and used auto loans and additional mortgage lending. During the month of June, credit unions added $9.1 billion in loans to their balance sheets partly funded by $6.2 billion in new savings. Surplus funds were drawn down by $12.4 billion to fund new loans and pay down $8.0 billion in wholesale borrowings. Paying-off borrowings in June slightly reduced the overall asset size of credit union balance sheets.

3 ● Credit Union Trends Report

Savings and Assets Credit union savings balances grew 7.5% during the 12 months ending in June (Figure 8), significantly faster than the 5.7% average annual growth rate recorded during the last 10 years. This strong savings growth rate was caused by the combination of fast membership growth, 3.8% during the last 12 months, and rising savings-per-member growth, 3.6% during the last year (Figure 9). The savings-per-member growth rate picked-up during the last two years due to falling gas prices and households deciding to save rather than spend this windfall. Meanwhile, the membership growth rate rose due to faster job growth and a rising demand for loans at credit unions. If households come to expect the fall in gas prices are more permanent than temporary, they will begin to spend the gas dividend windfall, which will dampen down credit union savings growth rates in 2017. Figure 8:

Figure 9:

Growth in Savings Per Member

Growth In Credit Union Savings 10

June 2016

Percent

7.5%

10 Year Average Growth Rate 5.7%

8

June 2015

Percent 10

10 Year Average Growth = 3.7%

8 6

6

3.6

4 4

2 2

13 12

14 06

14 12

15 06

15 12

15

14

13

12

11

10

09

08

16 06

Ju ne

13 06

16

12 12

07

06

0

0

Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

Capital and Other Key Measures The yield curve has flattened significantly over the last year, which will put downward pressure on credit unions’ net interest margins during the remainder of 2016 (Figure 10). Last December, the Federal Reserve raised the Fed Funds interest rate 0.25 percentage points, raising short-term interest rates and credit union cost of funds. Worries over global economic growth and Great Britain voting to leave the European Union created a capital “flight to safety,” which reduced longer-term interest rates. This will reduce credit union yield on assets as loan interest rates fall. Credit union loan-to-share ratios rose to 77.7% in June, up from 75.8% one year earlier (Figure 11). The recent cyclical high of 84.1% occurred during October 2007, two months before the start of the Great Recession. Loan-to-asset ratios reached 66% in June, the highest since October 2008, which will buoy net interest margins and offset the downward pressure on margins caused by the flattening yield curve. Figure 10:

Figure 11: Treasury Yield Curves

4.0

Loan-to-Asset & Loan-to-Share Ratios

4.0

June 2016

Percent 3.5

3.5

3.0

3.0

2.5

2.5

2.0

2.0

1.5

1.5

1.0

1.0

100 95

Recession July 1990 - March 1991

Yield to Maturity

90 85

Recession L/A Ratio L/S Ratio

Recession March 2001 – Nov. 2001

80

Recession Dec. 2007 – June 2009

Loan-to-Share = 84.1% Loan-to-Share = 77.7%

75

0.5

0.0

0.0 1 2 3

5

10

15 20 Years to Maturity

25

65 60

July 2016 June 2016 July 2015

0.5

70

30

Loan-toAsset = 66%

55 50

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

4 ● Credit Union Trends Report

Credit Unions and Members As of June 2016, CUNA estimates 6,119 credit unions were in operation, 7 fewer than May and 278 fewer than June 2015 (Figure 12). During the first half of 2016, approximately 117 credit unions ceased to exist because of mergers, purchase and assumptions, or liquidation. During a typical year, 46% of the total decline in the number of credit unions takes place in the first half of the year (Figure 13), which means we can forecast the 2016 full year decline in the number of credit unions to be 254, slightly below the 277 reported in 2015. The average asset size of a credit union now stands at $206.6 million, up 11.5% from a year ago. The median asset size is now $27.8 million, up 9.0% over the last year. The trend towards industry consolidation and bigger credit unions is only likely to accelerate due to the benefits of greater economies of scale, higher productivity, and larger earnings that are all achieved with a larger asset base. Larger more efficient credit unions will also raise the barrier to entry for new small credit unions. Figure 13:

Figure 12:

Comparison of Declines in # of CUs

Annual Net Decline in Number of CUs

June 2016 Actual = 6,119 Number of CUs

Annual Declines June to June

400

289

300

266

259

274

JAN - JUN

# of CUs

500 278

JUL - DEC

%’s = JAN - JUN Share of Annual Change

400 300

200 140

132

124

116

200

117

100

100 45%

46%

47%

44%

46%

49%

46%

47%

51%

44%

42%

05

06

07

08

09

10

11

12

13

14

15

0

0 12

13

14

15

16

12

13

YTD June Declines

14

15

16

Annual Declines Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

Credit union memberships grew a strong 392,000 in June, or 0.37%, which is similar to the 393,000 new members, or 0.38%, added in June 2015. Total credit union memberships have now reached 107.2 million – 33.1% of the total U.S. population of 323.7 million. Last June, 32.1% of the U.S. population belonged to a credit union. The membership gain was driven by strong demand for credit by the American consumer and the 292,000 new jobs added to the U.S. economy in June, according to the Bureau of Labor Statistics. Year-to-date credit unions added 2.23 million new members, (Figure 14), faster than the 1.8 million members added in 2015. Year-over-year memberships have increased at a 3.8% pace, (Figure 15), the fastest in more than 20 years. We expect the economy to add another 2.5 million jobs in 2016 and 2.3 million jobs in 2017 contributing to credit union membership growth of 3% in both 2016 and 2017. Figure 15:

Figure 14:

Comparison of Membership Increases

Annual Membership Growth

June 2016 Actual = 107.2 Million

4.5

Percent 4.0

3.8

3.91

4.0

3.5 3.5

3.6

3.7

3.8 3.8

3.5

3.5

3.1

3.19 3.0

2.82

3.0

2.5

2.5

2.23

2.0 1.5

June 2016 = 107.2 Million

Annual Increase June to June

Members in Millions

1.72 1.30

2.16

1.83

2.5 2.1

1.99 2.0

1.32

1.5

1.5

1.4

1.0 1.0

0.5

0.6

0.5

0.0 12

13

14

15

16

12

YTD June Increase Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

5 ● Credit Union Trends Report

13

14

15

Annual Increase

16

0.0 09

10

11

12

13

14

15

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 Source data: CUNA Economics & Statistics and CUNA Mutual Group - Economics

National Monthly Credit Union Aggregates YR/MO 14 06 14 07 14 08 14 09 14 10 14 11 14 12 15 01 15 02 15 03 15 04 15 05 15 06 15 07 15 08 15 09 15 10 15 11 15 12 16 01 16 02 16 03 16 04 16 05 16 06

|------------------ ($ Billions) ---------------------| LOANS ASSETS SAVINGS CAPITAL 689.5 1,125.5 959.8 119.6 698.6 1,129.1 958.7 120.0 706.3 1,138.8 965.8 121.3 711.6 1,130.0 958.5 121.5 718.5 1,146.3 971.1 122.8 723.4 1,147.5 969.5 123.7 728.9 1,144.7 970.4 123.5 732.7 1,157.8 978.4 124.8 734.6 1,179.7 999.5 124.9 739.4 1,181.6 1,004.5 126.3 746.7 1,184.3 1,003.3 126.9 753.7 1,195.2 1,007.8 127.5 763.5 1,191.2 1,006.8 127.8 771.0 1,203.3 1,016.7 128.7 779.5 1,201.2 1,010.7 129.3 787.5 1,203.4 1,012.3 130.5 791.7 1,218.7 1,027.1 131.2 797.4 1,217.8 1,024.0 131.2 804.9 1,227.8 1,036.3 130.9 808.5 1,234.8 1,033.3 132.7 809.2 1,252.6 1,054.8 133.9 817.9 1,264.6 1,071.8 134.6 823.1 1,279.2 1,081.9 135.4 831.8 1,274.0 1,076.5 135.9 840.9 1,273.6 1,082.7 137.9

(Millions) MEMBERS 100.1 100.3 100.6 100.9 101.0 101.1 101.5 101.6 101.9 102.2 102.5 102.9 103.3 103.5 103.9 104.4 104.6 104.8 105.0 105.2 105.5 106.0 106.4 106.8 107.2

CREDIT UNIONS 6,671 6,658 6,655 6,592 6,580 6,531 6,513 6,497 6,460 6,447 6,432 6,417 6,397 6,359 6,358 6,329 6,264 6,275 6,236 6,230 6,219 6,195 6,128 6,126 6,119

LOAN / SAVINGS 71.8 72.9 73.1 74.2 74.0 74.6 75.1 74.8 73.5 73.6 74.4 74.8 75.8 75.8 77.1 77.8 77.1 77.9 77.7 78.2 76.7 76.3 76.1 77.3 77.7

CAPITAL/ ASSET RATIO 10.6 10.6 10.7 10.8 10.7 10.8 10.8 10.8 10.6 10.7 10.7 10.7 10.7 10.7 10.8 10.8 10.8 10.8 10.7 10.7 10.7 10.6 10.6 10.7 10.8

# OF CUs DECLINE (259) (244) (226) (272) (254) (297) (282) (262) (286) (288) (267) (260) (274) (299) (296) (263) (316) (256) (277) (267) (241) (252) (304) (291) (278)

Delinquency Ratio* 0.852% 0.825% 0.841% 0.852% 0.832% 0.856% 0.848% 0.834% 0.738% 0.683% 0.728% 0.737% 0.740% 0.757% 0.779% 0.776% 0.790% 0.820% 0.809% 0.816% 0.764% 0.706% 0.714% 0.701% 0.701%

Credit Union Growth Rates Percent Change Previous Year YR/MO 14 06 14 07 14 08 14 09 14 10 14 11 14 12 15 01 15 02 15 03 15 04 15 05 15 06 15 07 15 08 15 09 15 10 15 11 15 12 16 01 16 02 16 03 16 04 16 05 16 06

LOANS 9.4 9.8 9.9 10.0 10.2 10.5 10.4 10.6 10.8 10.8 10.8 10.7 10.7 10.4 10.4 10.7 10.2 10.2 10.4 10.3 10.1 10.6 10.2 10.4 10.1

ASSETS 4.4 5.2 5.1 4.8 5.9 5.4 5.6 5.7 5.6 5.5 5.9 5.7 5.8 6.6 5.5 6.5 6.3 6.1 7.3 6.6 6.2 7.0 8.0 6.6 6.9

SAVINGS 3.4 3.7 3.7 3.6 4.9 4.0 4.4 4.3 4.2 4.3 4.8 4.3 4.9 6.1 4.7 5.6 5.8 5.6 6.8 5.5 5.5 6.7 7.8 6.9 7.5

CAPITAL 8.6 8.9 10.5 9.1 9.4 9.7 9.0 8.7 7.9 8.7 8.2 7.2 6.9 7.3 6.5 7.4 6.8 6.1 6.0 6.3 7.2 6.6 6.7 6.6 7.9

MEMBERS 2.9 2.6 2.8 2.9 2.9 3.0 3.1 3.1 3.1 3.0 3.0 3.1 3.2 3.2 3.2 3.5 3.7 3.6 3.5 3.5 3.6 3.8 3.7 3.8 3.8

* Loans two or more months delinquent as a percent of total loans.

6 ● Credit Union Trends Report

# OF CUs (3.7) (3.5) (3.3) (4.0) (3.7) (4.3) (4.2) (3.9) (4.2) (4.3) (4.0) (3.9) (4.1) (4.5) (4.5) (4.0) (4.8) (3.9) (4.2) (4.1) (3.7) (3.9) (4.7) (4.5) (4.3)

Distribution of Credit Union Loans Estimated $ (Billions) Outstanding ST

YR/MO 14 06 14 07 14 08 14 09 14 10 14 11 14 12 15 01 15 02 15 03 15 04 15 05 15 06 15 07 15 08 15 09 15 10 15 11 15 12 16 01 16 02 16 03 16 04 16 05 16 06

TOTAL NEW USED TOTAL LOANS | VEHICLE LOANS | 689.5 78.9 137.6 216.5 698.6 80.4 139.5 219.9 706.3 82.2 141.1 223.3 711.6 83.7 142.7 226.4 718.5 85.7 144.6 230.3 723.4 86.8 145.6 232.4 728.9 87.7 146.2 233.9 732.7 89.2 147.4 236.6 734.6 90.2 148.2 238.3 739.4 90.7 149.8 240.5 746.7 92.1 151.4 243.5 753.7 92.7 153.3 246.0 763.5 94.3 155.6 249.9 771.0 95.5 158.0 253.5 779.5 96.6 159.8 256.5 787.5 98.3 161.4 259.8 791.7 99.5 162.8 262.3 797.4 100.1 163.5 263.6 804.9 101.6 164.8 266.4 808.5 102.9 165.9 268.8 809.2 103.4 166.9 270.4 817.9 104.6 169.7 274.3 823.1 105.6 172.3 278.0 831.8 106.9 174.7 281.6 840.9 108.8 177.3 286.2

UNSEC CREDIT Ex. CC’S CARDS 30.4 43.7 31.2 44.2 31.4 44.7 31.6 44.9 31.9 45.0 32.2 45.6 32.6 46.8 32.9 46.3 32.5 45.5 32.1 45.5 32.7 45.8 32.9 46.3 33.4 46.6 34.1 47.0 34.6 47.7 34.6 47.8 34.8 47.8 35.2 48.5 35.5 49.6 35.7 49.2 35.1 48.6 35.1 48.7 35.5 48.7 35.8 49.3 36.3 49.7

CUCIC 284.3 288.5 293.0 293.1 298.3 301.0 302.8 304.5 307.8 307.7 312.3 315.7 322.7 327.2 330.2 333.4 335.5 337.1 341.7 345.9 347.5 350.6 353.9 360.6 357.8

1 MORT TOTAL 285.5 286.6 288.2 292.8 293.8 295.2 298.7 298.9 297.6 303.5 305.4 307.2 312.8 315.0 317.2 322.4 322.7 326.3 329.2 329.3 330.6 334.8 334.8 338.3 341.3

TOT. OTHR TOTAL MORT REAL ND 2 +HE ESTATE 72.0 357.5 72.5 359.1 72.8 361.0 72.9 365.8 73.8 367.6 74.0 369.2 73.4 372.1 74.5 373.3 74.1 371.7 73.0 376.5 74.5 379.8 74.4 381.7 73.7 386.5 74.4 389.4 75.1 392.3 74.9 397.3 75.9 398.6 76.2 402.4 75.9 405.1 76.6 405.9 76.4 407.0 75.8 410.6 76.9 411.7 77.5 415.8 77.8 419.1

MBLs* 47.8 51.0 52.2 52.8 52.6 53.2 53.9 54.9 55.1 55.2 54.6 56.3 54.3 54.4 56.9 56.8 57.5 57.8 58.0 56.7 54.6 56.6 57.5 55.4 64.0

TOT. OTHR TOTAL MORT REAL ND 2 +HE ESTATE (0.8) 7.6 0.3 7.0 1.0 6.6 0.9 7.4 2.5 7.2 3.1 7.5 1.3 7.4 3.3 7.7 3.3 6.9 2.5 7.6 4.2 8.0 3.9 7.9 2.3 8.1 2.6 8.4 3.1 8.7 2.8 8.6 2.8 8.5 3.0 9.0 3.4 8.9 2.9 8.7 3.1 9.5 3.9 9.1 3.3 8.9 4.1 8.4 5.6 8.9

MBLs* 6.7 13.9 16.7 18.1 14.8 11.4 12.0 14.4 15.8 16.2 14.3 17.4 13.6 4.9 8.5 8.0 8.8 8.6 7.5 3.3 -1.0 2.6 5.3 -1.7 18.0

* Member Business Loans

Distribution of Credit Union Loans Percent Change From Prior Year ST

YR/MO 14 06 14 07 14 08 14 09 14 10 14 11 14 12 15 01 15 02 15 03 15 04 15 05 15 06 15 07 15 08 15 09 15 10 15 11 15 12 16 01 16 02 16 03 16 04 16 05 16 06

TOTAL NEW USED TOTAL LOANS | VEHICLE LOANS | 9.4 16.9 11.5 13.4 9.8 17.3 11.7 13.7 9.9 18.3 11.8 14.1 10.0 19.3 12.2 14.7 10.2 20.2 12.2 15.0 10.5 20.7 12.4 15.4 10.4 20.9 12.8 15.7 10.6 21.3 13.0 16.0 10.8 22.4 13.1 16.4 10.8 21.4 13.2 16.1 10.8 21.9 13.0 16.2 10.7 20.5 13.2 15.8 10.7 19.5 13.0 15.4 10.4 18.7 13.3 15.3 10.4 17.5 13.3 14.9 10.7 17.5 13.1 14.7 10.2 16.0 12.6 13.9 10.2 15.3 12.3 13.4 10.4 15.9 12.7 13.9 10.3 15.3 12.5 13.6 10.1 14.7 12.7 13.4 10.6 15.3 13.3 14.0 10.2 14.7 13.8 14.2 10.4 15.4 13.9 14.5 10.1 15.4 14.0 14.5

7 ● Credit Union Trends Report

UNSEC CREDIT Ex. CC’S CARDS 10.1 8.4 10.7 8.3 9.7 8.3 10.1 8.2 9.7 8.1 10.1 8.6 10.0 7.9 10.5 8.2 9.9 8.0 10.2 7.6 9.7 7.4 9.4 7.3 9.7 6.8 9.4 6.3 10.0 6.6 9.5 6.5 9.2 6.3 9.4 6.3 8.4 6.1 8.3 6.3 8.1 6.8 9.1 6.9 8.6 6.5 8.6 6.6 8.8 6.6

CUCIC 12.3 12.8 13.0 11.9 13.3 14.1 14.0 13.7 14.9 14.0 13.9 13.0 13.5 13.7 12.8 13.7 12.6 12.0 12.9 13.6 12.9 13.9 13.3 14.2 10.9

1 MORT TOTAL 9.9 8.8 8.1 9.2 8.5 8.7 9.1 8.9 7.8 8.9 9.0 8.9 9.6 9.9 10.1 10.1 9.9 10.5 10.2 10.2 11.1 10.3 9.6 10.1 9.1

Annual Growth Rates Total Loans & Installment Credit Percent

Total Loans

CU Loan Portfolio $ in Billions $804.9

800

CUCIC

$840.9

$728.9

16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

700

$660.1

600 500 400

$474.2

$511.1

51.8% 54.1%

$544.1

$580.5 $587.4 $580.3 $587.0

59.6% 56.7% 59.3%

$615.1

61.0% 61.5% 60.3%

59.8% 58.5%

57.5% 57.5%

300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 June

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2014

2015

2016

CIC

CIC Share of Total Loans at Credit Unions

Percent

$ Billions

44

Other

Consumer Installment Credit at Credit Unions

380 43.4

360

43.0 42.942.9 42.8

43

42.5 42.442.4 42.4 42.3 42.3 42.3

340

42.5

320

41.9

42

41.9 41.8 41.6

41.6 41.6 41.5 41.5 41.4 41.241.2 41.2 41.0

41

330 327 323

298 293293 288 284

300 280

40.7 40.440.440.4

268268270

305 301303

308308

351 346 348 342 337 336 333

361 358 354

316 312

279 274

260

40

240

39

1

2 3

4

5

6

7 8

2014

9 10 11 12 1

2

3

4 5

6

7

8 9 10 11 12 1 2

2015

3

4

5 6

7

8

9 10 11 12

220

1 2

3 4 5

2016

6 7

8 9 10 11 12 1 2

3 4 5

2014

6 7

2015

8 9 10 11 12 1 2

3 4 5

6 7

8 9 10 11 12

2016

This report on key CU indicators is based on data from CUNA E&S’s Monthly Credit Union Estimates, the Federal Reserve Board, and CUNA Mutual Group – Economics. To access this report on the Internet:  Sign in at cunamutual.com  Go to the “Resource Library” tab  Under “Publications” heading, select Credit Union Trends Report If you have any questions, comments, or need additional information, please call. Thank you. Steven Rick 800.356.2644, Ext. 665.5454 [email protected] CUNA Mutual Group – Economics © CUNA Mutual Group, 2016 All Rights Reserved. CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates.

8 ● Credit Union Trends Report