Total Assets Pass the Trillion Dollar Mark
Credit Unions have now topped over $1 trillion in total assets and $100 billion of net worth as membership growth has accelerated rapidly, according to the reports that the 7,000-plus not-for-profit member-owned financial institutions provided to government regulators. As many as 667,000 new credit union members joined in the first quarter of 2012, compared to 1.4 million over the whole year in 2011. Membership is now 92.5 million.
Lending by credit unions continues to climb, as it did over the last year, but the types of loans are changing. A decreasing proportion of credit card debt, unsecured loans, and miscellaneous real estate loans is being made up by increasing first mortgage loans, used car loans, and student loans. The growth of new deposits is outpacing the growth of loans, so the ratio of loans to shares is down 3%, to about 66%.
Bad debts have declined, but remain higher than normal. The number of past-due loans, compared to the number of current loans, is 1.44%. Charge-offs have decreased to 0.78 percent, with a fifth of the charge-offs caused by member bankruptcy filings. In all, nearly 71,000 credit union members filed for bankruptcy, up from almost 53,000 in last year’s ending quarter.
Mergers and closings have been a part of the changing picture, accounting for about 75 fewer credit unions from a year ago. The National Credit Union Administration has protected member accounts by moving them to larger and stronger credit unions, where necessary. Overall, declining interest expenses have helped the industry, as have new sources of operating income. Net income rose to $2.1 billion, a 17% increase over last year’s fourth quarter.
Members poured an additional $38.6 billion into their savings at credit unions during the first quarter, bringing deposits to a total of $866 billion. First quarter growth in 2012 nearly equaled the entire year’s growth for 2011. Besides savings, the use of checking accounts (known as share drafts at credit unions) rose by 11.4 percent.
Consumers are making adjustments to meet their needs in today’s challenging economy. Credit unions are shaping up to be an important piece of the puzzle.