PHOENIX (3/7/13)--Credit unions in Arizona told how the state's credit unions took the top spot in the nation on net income earned compared with assets under their management last year in an article entitled "Arizona credit unions earn their way to the top spot" in Tuesday's Arizona Capitol Times.
The state's 50 federally insured credit unions saw a net income of 1.39% of their average assets last year. The national average for credit unions is 0.86%. The article cites statistics from the National Credit Union Administration's (NCUA) quarterly report, which was released Tuesday. (See related story in Wednesday's News Now, "NCUA 4Q Map Details Financial, Membership Gains For CUs.")
Prescott (Ariz.) FCU, which has $6.3 million in assets, hasn't raised fees in more than two and a half years, and the credit union takes care of its members, CEO Kathleen Wallis told the publication. The credit union is doing better because its "rates are so low, and we haven't had a lot of bankruptcies and collections issues," she added. It also noted that it doesn't have a lot of delinquencies on auto loans because it is lending to members.
Phoenix-based Arizona State CU, which has $1.43 billion in assets, also had a strong year, with a return on average assets of 1.28%, largely due to auto and mortgage lending, Paul Stull, senior vice president of strategy and brand, told the publication.
During 2012, Arizona State refinanced thousands of mortgages through the federal government's Home Affordable Refinance Program (HARP). By doing this, the credit union helped members reduce their monthly payments by $369 a month, on average, he said.
Arizona's credit unions are seeing loan delinquencies drop as the state's economy recovers from the Great Recession, which means they can hold less in reserves against losses, which helps boost earnings, NCUA told the publication.
The article noted that the return on assets measures how well a credit union invests its members' deposits and can "translate to higher savings rates, lower loan rates and new services such as banking by phone," said the article.
"For the credit union itself, it's a measure of how well it has made lending decisions, primarily auto loans and mortgage loans, as well as how well it has controlled expenses," it added. To read the entire article, use the link.