FICUs Demonstrate Strong Loan Growth and Consistent Savings, Membership Growth Remains Weak

ALEXANDRIA, Va.-Federally insured credit unions have shown consistent savings and equity growth, NCUA reported last week, while loan growth continues to expand through the third quarter. However, credit union membership growth remains weak in 2004. Credit unions’ net worth ratio increased from 10.71% at year-end 2003 to 10.87% at the end of September. Return on average assets stood at 0.94% and the loan-to-share ratio rose to 73.72%, the highest it has been since 2001. At the same time, delinquencies were down from 0.76% to 0.71% during the year so far. “America’s credit unions are in a solid asset and net worth capital position,” NCUA Chairman JoAnn Johnson commented. “Third quarter results are on target considering the steady economic rebound recognized by this data and national indicators. Clearly, with the economic upswing more members are diversifying savings and investments. The third quarter performance in lending growth is indicative of the increased consumer confidence. Going forward, credit unions are well positioned by maintaining safe and sound diversification of portfolios.” Overall, loans increased 8.02% from January to September to $406.3 billion from $376.1 billion. First mortgages lead loan growth at 8.09% and account for more than 31% of all loans. Other types of mortgage loans combined grew 18.4% to $59.3 billion. Additionally, new auto loans grew 10.1% and used car loans were up 4.26%. Meanwhile, unsecured credit card lending declined 2.33% and unsecured loans were down a quarter of a percent. Shares were up 4.31% in the first three quarters from $528.3 billion to $551.1 billion, according to NCUA. Regular shares grew 4.89% to $201.5 billion and other types of shares, such as IRA/KEOGH and certificates of deposit, grew 3.51% to $280.5 billion. With lending up, investments dropped 1.32% to $200.8 billion from $203.5 billion. Corporate credit union investments grew 6.37% despite a 4.2% decline between June and September. Otherwise, bank and thrift deposits declined 1.76% during the year and 3.8% in the third quarter. The largest category of investments, available for sale securities, declined 0.12% during the year and 4.0% in the third quarter. Membership growth is still plodding along set to hit about 2% again this year. So far, credit union membership has grown 1.58% this year to 83.7 million. -