PenFed breaks record as loan origination increases in Q3

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PenFed sign at its head office in Tysons Corner, Virginia (Source: Shutterstock)

PenFed Credit Union broke another record for third-quarter mortgage originations and was successful in ramping up auto loan production amid shortages.

PenFed of Tysons, Va., Just outside of Washington, DC, has provided approximately $ 1.2 billion in new and used car loans in the three months that ended Sept. 30. This represents an increase of about $ 545 million in the third quarter of 2021 and $ 1 billion in the second of this year. trimester.

“This quarter has probably been one of the best we have ever had,” said Ricardo Chamorro, executive vice president of consumer banking.

At the same time, Mr. Chamorro said that PenFed, like other lenders, has been hit by the semiconductor chip shortage which has limited purchases of new cars, moved some purchases to the car market. occasion and delayed others.

“The chip issue and the entire supply chain in general have dramatically disrupted the market,” Chamorro said.

Ricardo chamorro Ricardo chamorro

New car sales fell from a seasonally adjusted annual rate of 17 million vehicles before the pandemic to 8.7 million in April 2020, one month after the start of the COVID-19 pandemic. He started to recover quickly before being hampered by shortages this year. Cox Automotive forecast on October 27 that the October SAAR would be 11.8 million vehicles, up from 12.2 million in September and 16.4 million in October 2020.

“These are all supply issues,” Chamorro said. “The good news is that demand is healthy. Americans’ love affair with automobiles is alive and well. When the supply chain heals itself, I hope it comes back.

PenFed also rose a notch to become the country’s third-largest credit union based on its $ 29.7 billion in assets as of September 30, up 13.1% from the previous year and 7.4% compared to three months earlier. PenFed was the fourth in the country since being eclipsed in the fourth quarter of 2020 by BECU of Tukwila, Washington. The Seattle-area credit union was No.4 with $ 29.6 billion in assets and 1.3 million members as of September 30.

PenFed’s membership was 2.4 million, up 15.4% from the previous year and 2.6% from three months earlier. NCUA and PenFed data also shows:

  • PenFed reported net income of $ 89 million in the three months ending September 30, or 1.28% annualized of its average assets. ROA rose 1.10% in the second quarter and 0.72% a year ago. For the top 10 credit unions, the ROA was 1.38% in the third quarter, down from a record 1.79% in the second quarter and up from 0.60% a year ago.
  • Residential real estate arrangements amounted to $ 4.4 billion, up 3% from the second quarter and 64% from a year ago. PenFed said the mortgage arrangements included $ 296 million in home equity, up from $ 301 million in the second quarter.
  • Commercial real estate loans were $ 752.4 million, up 20% from the second quarter.
  • Non-real estate originations amounted to $ 4.4 billion, up 55% from the second quarter and 148% from a year ago.

With credit cards, Chamorro said PenFed is seeing trends reflected by third quarter reports from many banks: He said balances would increase next year with less money coming from the government’s “liquidity bazooka” federal stimulus payments.

“Trends are returning to normal in terms of consumer behavior, consumer consumption and average balances,” he said.

Meanwhile, Chamorro said PenFed is evolving from its data team to a marketing team to adapt to a market that increasingly involves a “coop-petition” with fintechs.

“You’ve seen fintechs buy fintechs. Banks buy fintechs and vice versa. It’s just a part of the whole economy.

“There are fintechs trying to be broader in their way of marketing, bringing their own captive (lending) capabilities. And lenders like us are going to become more fintech ourselves by investing in technology and making sure we’re more agile.

“In the middle, there is a lot of cooperation and partnership,” he said. “Some fintechs don’t want to hold the loans, and we do.”


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