MADISON, Wis. (8/5/13)--Credit union loans outstanding increased in June, while savings balances dropped, according to the June monthly sample of credit unions by the Credit Union National Association.
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"Credit loan balances rose 2% in the first of 2013, faster than the 1.8% pace set in the first half of 2012," Steve Rick, CUNA senior economist, said Friday. "New-auto loans continue to outpace other categories, growing 5% over the last six months, compared with 2.8% for the similar period last year. Fixed-rate first mortgage loan balances grew a strong 1.7% in June as low rates in April and May encouraged many fence-sitting homeowners to jump off and buy a home."
Credit union loans outstanding grew 0.8% to $627.6 billion in June and 2% during the first half of 2013. Fixed-rate first mortgages led loan growth, rising 1.7%. Used-auto loans grew 1.6%, while new-auto loans grew 1.5%. Unsecured personal loans rose 1.2%, and credit card loans increased 1%. Adjustable-rate mortgages, home-equity loans and other mortgages declined 1.4%, 1.1% and 0.7%, respectively.
"With the recent jump in mortgage rates we expect slower mortgage balance growth in the second half of the year," Rick said.
Credit union savings balances dropped 0.4% in June to $930 billion, compared with a 0.8% increase in June 2012. Individual retirement accounts increased 0.8%, regular shares 0.4%, and money market accounts 0.1%. Share drafts declined 3.9% and one-year certificates dropped 1%.
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"Savings balance growth has tapered off considerably over the past year," Rick explained. "Savings balances rose only 3.7% during the first half of 2013, down from 5% in the first half of last year. Certificates of deposit (CDs) continue to decline as members roll over maturing CDs into regular savings balances while they wait for the Federal Reserve to raise interest rates sometime over the next two years."
Regarding asset quality, credit unions' 60-plus-day delinquency rate remained at 1% the past five months.
"Credit quality has leveled off in the second quarter," Rick said. "The delinquency rate plateaued at 0.98% in the second quarter, down from 1.2% last year but still above the 0.75% long-run average."
With loan growth outpacing savings growth during June, the loan-to-savings ratio increased from to 67.5% from 66.7% in May. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 19%.
Total credit union membership grew 0.2% to 97.6 million, said CUNA's monthly estimates.
The movement's overall capital-to-asset ratio remained at 10%, with $110 billion in total capital.