Rates & Ratios: Cards Lead Loan Decline

CU savings balances also fall during January.

March 5, 2012

Credit union loans outstanding decreased 0.2% during January 2012 compared to a 0.4% increase in December 2011, according to CUNA's economics and statistics department.

Credit cards lead the decline, decreasing 1.8%, followed by fixed-rate mortgages (-0.3%) and used-auto loans (-0.2%).

On the rise were adjustable-rate mortgages, increasing 1.2%, and home equity and unsecured personal loans, which both grew 0.1%.


Credit union savings balances declined 0.5% in January compared to a 1.2% increase in December.

Share drafts declined 4.1%, while individual retirement accounts and one-year certificates decreased 0.5% and 0.4%, respectively.

Money market accounts grew 1.1% and regular shares increased 0.2%.

Other measures

Credit unions’ asset quality, liquidity, and capital ratios remained unchanged during January:

  • Credit unions’ 60+ day delinquency rate is 1.6%;
  • Credit unions’ overall loan-to-savings ratio is 69%;
  • Credit unions’ liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) is 18%; and
  • The movement’s overall capital-to-asset ratio is 10%.

The total dollar amount of capital is $101 billion.


Credit union earnings took a big hit in third-quarter 2011, primarily due to a hefty corporate stabilization expense, according to Mike Schenk, CUNA's vice president, economics and statistics.

"That’s the bad news," he says. "The good news: The days of declining credit union return-on-assets [ROA] likely are behind us—at least for now."

Full-year 2011 total credit union ROA should come in at about 0.65% to 0.7%, Schenk says.

While that’s well below the 0.9% long-run average earnings rate, it would represent an approximate 20 basis point (bp) increase over earnings recorded in 2010.

"Looking ahead, it’s likely earnings will again increase this year," Schenk says. "Specifically, aggregate bottom-line results probably will jump by 15 bp to 20 bp in 2012, putting movementwide ROA in the neighborhood of 0.85%—just shy of the long-run norm."

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