MADISON, Wis. (6/4/13)--Over the past year, credit union loan balances are up 5.2%--the fastest annual pace since 2008, according to an analysis by a Credit Union National Association economist of CUNA's monthly sample of credit unions for April.
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"Credit unions reported strong financial performance in April, as well as the first four months of the year," Steve Rick, CUNA senior economist, told News Now. "Loan balances rose 0.63% in April 2013, compared with 0.57% in April 2012. New- and used-auto loan balances continue to surge with April growth rates of 0.96% and 1.1%, respectively."
CUNA released its Monthly Credit Union Estimates Tuesday. Credit union loans totaled $621.1 billion in April, compared with $590.3 billion in April 2012. Credit union loans outstanding grew 0.6% in April--the same as in April 2012. Leading loan growth were adjustable rate mortgages (2.1%), unsecured personal loans (1.1%), used-auto loans (1.1%), new-auto loans (1%) and credit cards (0.3%). Fixed-rate mortgages and other mortgage loans declined 1.2% and 0.3%, respectively.
"Despite the recent pick up in loan growth, the average credit union loan-to-savings ratio fell from 67.2% in April 2012 to 67% in April 2013, due to slightly faster growth of savings compared to loans," Rick said. The ratio was 66% in March.
The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--fell to 20% in April from 21% in March. "This excess liquidity is keeping downward pressure on credit unions' net interest margins and overall earnings. Credit unions' return-on-assets ratio came in at 0.85% in the first four months of this year, below the 1.02% average set in the 20 years prior to the Great Recession."
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Credit union savings totaled $927.2 billion in April--or $48.4 billion more than the $878.8 billion in April 2012. Credit union savings balances declined 0.4% in April, compared with a 0.7% decrease in April 2012. One-year certificates and individual retirement accounts grew 0.3% and 0.1%, respectively, while share drafts declined 2.4%, money market accounts fell 0.5%, and regular shares declined 0.2%.
Regarding asset quality, credit unions' 60-plus-day delinquency rate fell to 1% in April from 1.1% in March.
"Improving loan quality is reducing provision-for-loan-loss expense, and therefore offsetting somewhat the tighter net interest margins," Rick said. "The delinquent-loans to total-loans ratio fell to 1.02% in April, down from 1.37% in April 2012. This is the lowest loan delinquency rate since August 2008. We expect the credit union delinquency rate to fall to 0.9% by the end of this year and 0.8% by the end of 2014. The credit union loan delinquency rate will then be approaching the 0.75% average set in the 20 years prior to the Great Recession."
Total credit union membership grew 0.2% during April. As of April, credit union membership totaled 96.7 million.
The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $112 billion.