MADISON, Wis. (5/1/13)--First-quarter credit union financial results indicate members were more willing to borrow and less willing to save than a year earlier, according to a Credit Union National Association economist's analysis of March's monthly sample of credit unions.
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"Loan balances rose 0.4% in the first three months of 2013, compared with a slight decline in the first quarter of 2012," Steve Rick, CUNA senior economist, told News Now. "Members are in the auto-buying mood with new- and used-auto loan balances rising 2.5% and 2.3%, respectively, in the first quarter, compared with 0% and 1.2% last year.
CUNA economists are forecasting overall credit union loan balances to rise 5.5% this year, "the fastest pace since 2008," he added. "The increase in loan balances, combined with the simultaneous drop in the dollar amount of delinquent loans, brought down the loan delinquency rate--delinquent loans to total loans--from 1.15% at the end of 2012 to 1.03% at the end of March 2013. We expect the delinquency rate to fall another 10 basis points to end the year around 0.93%."
CUNA released its Monthly Credit Union Estimates Tuesday. Credit union loans totaled $617.3 billion, compared with $586.9 billion in March 2012. Credit union loans outstanding rose 0.3% during March, compared with a 0.1% increase for the same month last year. Fixed-rate first mortgages led loan growth, increasing 1.6%. Used-auto loans rose 1.2%, home-equity increased 1%, and new-auto loans went up 0.9%. Adjustable-rate mortgages declined 1.6%, other loans outstanding dropped 1.4%, and unsecured personal loans decreased 0.5%.
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Credit union savings totaled $931.1 billion in March--or $46.5 billion more than $884.6 billion in March 2012. Credit union savings balances rose 1.8% in March, compared with a 2.7% increase in March 2012. Share drafts led savings growth with an increase of 3.9%, followed by regular shares (2.8%), individual retirement accounts (1.6%), and money market accounts (0.9%). One-year certificates fell 0.2% during March.
"First-quarter savings balance growth (3.8%) came in below last year's pace (4.6%) due to the expiration of the payroll tax cut, higher gas prices and an increased willingness by members to spend," Rick explained. "For the year, we expect savings balance growth to come in at 5%, slightly below last year's pace of 6%."
The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $111 billion.
"Credit unions reported first-quarter earnings of 0.75%--as a percentage of average assets--similar to the pace set last year," Rick said. "This earnings rate should be sufficient to boost capital-to-asset ratios from 10.2% today to 10.7% by year end."
Total credit union membership grew 0.3% during March 2013. As of February, credit union membership totaled 96.7 million.
With savings outpacing loans, credit union's average loan-to-savings ratio decreased one percentage point, to 66.3% in March from 67.3% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--is 21%.
Credit unions' 60-plus-day delinquency rate declined to 1% during March from 1.1% in February.