Credit Union’s Continue to Grow

Credit union growth has continued and Bank Transfer Day, November 5, 2011, wasn’t just a short lived event.  The National Credit Union Administration (NCUA) compiled data from second quarter 2012 based on information from federal credit unions. NCUA is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions.

In second quarter 2012, credit union membership increased by 643,322, which was a new record. Total credit union members totaled 93.1 million and deposited an additional $2.7 in savings. The number of credit unions decreased from 7,019 to 6,960 in the second quarter 2012. Credit unions earnings in second quarter 2012  increased $59.7 million more than in the prior quarter, due to  Increases in fee income and other operating income, accompanied by declines in expenses for interest and loan losses.

Increase in loans

Loans booked totaled $581.7 billion in second quarter 2012, which was a 1.7 percent increase over first quarter 2012. This was the fifth quarter in a row loans increased.

First mortgage loans increased by 1.7 percent in second quarter 2012 over first quarter.

New and used auto loans each increased by 2.8 percent over the previous quarter.

Business loans to members totaled $40.2 billion in second quarter 2012, compared to $39.7 billion in first quarter 2012 or a 1.2 percent increase.

Short-term small loans totaled $16.7 million during second quarter 2012 or an increase of 23.9 percent over first quarter 2012. This loan is a substitution for payday loans, but is low-cost and consumer-friendly.

Decrease in delinquencies

Charge-off rate was 0.75 percent in second quarter 2012 or a .03 percent decrease from first quarter 2012.

New bankruptcy filings were 58,386 or a 17.3 percent decrease from the previous quarter.

Charged-off loans due to bankruptcy increased slightly to 21.4 percent from 20.8 percent in the first quarter.

Key Credit Union Indicators Continue Improving

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According to NCUA’s report, primary balance sheet and income statement indicators from federally insured credit unions generally improved in the second quarter over the first quarter of 2012:

Credit union net worth grew 2.1 percent to $102.4 billion from $100.3 billion.

Industry total assets increased 0.6 percent to $1,007.6 billion from $1,001.8 billion.

Total savings rose 0.3 percent to $868.8 billion from $866.0 billion.

Credit union investments, cash on deposit, and cash equivalents declined slightly by 1.3 percent to $386.5 billion from $391.8 billion.

Total loans expanded by 1.7 percent to $581.7 billion from $572.0 billion.

Credit union net income was $2,138.1 billion in second quarter 2012, compared to$2,078.4 billion in the previous quarter or a 2.9 percent increase.

“Lending is the investment needed to support a recovering economy. So, the largest quarterly increase since the fall of 2008 demonstrates that credit unions are playing an important role in efforts to create jobs, stimulate small businesses, and revitalize communities,” said NCUA Board Chairman Debbie Matz. “The credit union industry’s performance further strengthened in almost every category. Assets, earnings, and net worth rose, as charge-offs, bankruptcy filings, and loan loss reserves declined. Credit unions continued to add a significant number of members and now serve more than 93 million Americans.”

Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.