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CU credit-quality metrics stabilized in December
MADISON, Wis. (2/2/12)--Credit union credit-quality metrics stabilized in December, while 2011 saw a rise in credit union assets and a reduction in the overall number of credit unions, according to a Credit Union National Association (CUNA) economist's analysis of December's monthly sample of credit unions.

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"Credit union credit-quality metrics have stabilized at a relatively high level," Steve Rick, CUNA senior economist, told News Now. "Credit union loan delinquency rates averaged roughly 1.6% since March 2011, after falling from the recent high of 1.88% in March of 2010. With the economic recovery continuing through 2012, we expect the unemployment rate to continue to fall, albeit slowly, which should put further downward pressure on the loan delinquency rate."

For December, credit unions' 60-plus-day delinquency rate remained at 1.6%, the monthly estimates said.

Credit union loans outstanding increased about 0.4% during December, compared with a 0.1% gain in November. Credit card loans led loan growth with a 2.4% rise, followed by fixed-rate mortgages (1.9%), unsecured personal loans (0.9%) and used-auto loans (0.4%). New-auto loans and home equity loans each decreased 0.4%, and adjustable-rate mortgages declined 1.2%. Credit union loans totaled $586.3 billion, compared with $580.3 billion in December 2010, said the monthly estimates.

"Credit union loan balances increased 1% in 2011, a slight turnaround from the 1.2% drop in loan balances in 2010, according to CUNA's monthly survey of credit unions," Rick said. "Last year was the third consecutive year of basically little-to-no loan growth at credit unions.

"We expect loan growth in 2012 to be a little better, with forecasts of around 3%, as credit union members relieve some pent-up demand for durable goods such as automobiles and home furnishings," he added.

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Credit union savings balances grew 1.1% in December, compared with a 0.1% increase in November. Share drafts led savings growth with a 4.4% gain, followed by regular shares, which rose 1.3%, and money market accounts, which climbed 0.7%. Individual retirement accounts increased 0.4%, and one-year certificates increased 0.1%. Credit union savings in December totaled $846.7 billion--or $42.9 billion more than the $803.8 billion in December 2010.

The loan-to-savings ratio decreased slightly to 69%. Credit unions' liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 18%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $101 billion.

Overall, last year saw an increase in credit union assets, while there was further consolidation in the industry. "Credit union assets rose 5.3% in 2011 to reach $847 billion, while the number of credit unions fell 3.4% to 7,339," Rick said.


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