Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Capital levels rise with increases in member savings
MADISON, Wis. (9/3/09)--Credit union capital levels closed in on their pre-financial crisis highs, and credit union members increased their savings balances by a significant amount in July, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions.
Click to view larger image Click for larger view
“In July, total credit union capital grew 0.7% to reach $89.037 billion, just shy of the high-water mark reached last November of $90.840 billion,” Steve Rick, CUNA senior economist, told News Now. “However, the 9.3% asset growth since November has pushed the credit union capital-to-asset ratio down to 9.8% in July from 10.9% last November.” Credit union savings balances increased 1.0% in July to $763.8 billion. That’s 9.5% more than during the first seven months of 2009. During the month of July, share drafts increased 3.9%, followed by money market accounts (2.1%), regular shares (0.7%) and one-year certificates (0.3%). Individual retirement accounts declined (-0.6%). “Credit union members increased their savings balances by a strong 1% in July, with the fastest pace set in the share draft (3.9%) and money market account (2.1%) products,” Rick said. “Much of this growth, however, was due to a month-end payday. But so far this year, savings balances are up 9.5%, faster than the 5.8% pace set during the first seven months last year. “Many credit union members are trying to increase their precautionary savings balances due to job-loss fears,” he added. “But for many, this has become a difficult endeavor as layoffs, furloughs and paycuts reduce their income.” Credit union loans outstanding increased 0.2% during July to $586.3 billion, which is 1.0% more than in the first seven months of 2009. That is down from a 4.1% increase during the same period of 2008.
Click to view larger image Click for larger view
In July, other loans led loan growth, rising 2.8%, followed by credit card loans (1.3%), home equity loans (1.0%), used-auto loans (0.6%), unsecured personal loans (0.5%) and other mortgages (0.2%). However, new-auto loans declined (-0.2%), as did fixed-rate mortgages (-0.5%) and adjustable-rate mortgages (-1.4%). “Loan growth has dropped off sharply so far this year as members try to deleverage their balance sheets,” Rick said. “Loans grew only 1% during the first seven months, compared to 4.1% increase for the similar period last year. Fixed-rate first mortgages are the only loan category reporting decent growth--5.7%--so far this year, but the growth still is less than half the pace set last year--12.4%.” The loan-to-savings ratio decreased slightly to 76.8% in July from 77.5% in June. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--increased to 21% in July from 20% in June. “The growth rate disparity between credit union loan and savings balances has increased the investment portfolio by 31% over the last seven months,” Rick explained. “Deposits at corporate credit unions have fallen from 17.2% of surplus funds--cash plus investments--in July 2008 to 13.8% today. Government securities and deposits at banks were the investment categories with a rising share of surplus funds.” Sixty-plus-day delinquencies at credit unions remained constant at 1.5% in July. “The weak labor and housing markets were the major factors contributing to a 3.3% jump in total credit union loans delinquent--$8.8 billion--in July,” Rick said. “The ratio of delinquent loans-to-loans now stands at 1.5%, up from 0.95% this time last year. With net job creation not expected until the spring of 2010, credit unions should plan for rising delinquency and loan charge-off rates well into next year.” The movement’s overall capital-to-asset ratio remained constant at 9.8% in July. The total dollar amount of capital is $88 billion.
Other Resources

RSS print
News Now LiveWire
Learn how to stay competitive with new research blog from @CUNA's econ/statistics dept in Wed's #NewsNow
3 hours ago
#FOMC meeting watch: Change in forward guidance expected #Market #NewsNow http://t.co/PH41VN1j9l
4 hours ago
Member growth at #creditunion continues despite mill closure #NewsNow http://t.co/rNRjLBjvX9
6 hours ago
CA/NV league pres/CEO Dykstra in @sacbee_news: Retailers should hold accountability in data breaches http://t.co/odyHd9N2OG
7 hours ago
Fin. lit. ideas percolate during .@NW_Banking #tweetchat #NewsNow http://t.co/nSS9Iiw0e0
7 hours ago