MADISON, Wis. (4/3/13)--Credit unions reported better financial performance numbers in the first two months of 2013, when compared with a similar period in 2012, according to a Credit Union National Association senior economist's analysis of CUNA's Monthly Credit Union Estimates for February.
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"Loan balances are currently rising at a 5% annual rate, compared to a 4% pace last year," said Steve Rick, CUNA senior economist. "We expect loan growth to accelerate to 5.5% for the full year, up from 4.8% in 2012. New-auto and used-auto loans are leading the way with growth over the last 12 months of 10.9% and 8.7%, respectfully," he told News Now.
According to the monthly estimates, credit unions' loans in February declined 0.1% from January--to $615.4 billion. That compares with February 2012's total of $586.1 billion in loans, a 1.7% decrease from January 2012.
February saw an increase in new-auto loans, up 1% over January; used-auto loans, up 0.4%, and adjustable-rate mortgages, up 0.3%. Loans that declined included unsecured personal loans and credit cards, down 1.2% each; home-equity loans, down 0.9%; and fixed-rate first mortgages, down 0.1%.
"The credit quality of the loan portfolio has also improved over the last year," Rick said. "The credit union loan delinquency rate declined to 1.11% in February, down from 1.49% one year earlier, as the dollar amount of delinquent loan balances fell 22% and the total dollar amount of loans rose 5%," he said.
Credit unions' 60-plus day delinquency rate remained at 1% during February, the same as in January, said the estimates report.
"Credit unions also posted better earnings in the first couple of months of 2013," Rick added. "Net income as a percent of average assets (return on assets) rose to 71 basis points from 65 bps during the first two months of each year. Higher fee income and lower provision for loan loss expense were factors driving the improvement."
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Savings at credit unions in February totaled $914.6 billion, compared with $861.6 billion for the same month in 2012. Savings balances grew 2% since January. Leading that growth were share drafts, which increased 7.3%; regular shares, up 3.6%; money market accounts, up 0.8%; and one-year certificates, which rose 0.4%. Individual retirement accounts declined 1.8% from January to February.
With savings outpacing loans, credit unions' average loan-to-savings ratio decreased to 67.3% from 68.7% in January. The liquidity ratio, or the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities, was 20% in February.
Credit union membership increased 0.3% in February--to 96.4 million members. That compares with a 0.2% increase for the period a year earlier.
Credit unions' capital-to-asset ratio during the month remained at 10%, with $110 billion in total capital.
"Looking ahead, we expect improved economic growth in 2013 due to improving housing, energy and durable goods sectors," Rick told News Now. "With this backdrop, credit union operating results should generally reflect modest improvement in 2013."