HIGHTSTOWN, N.J. (7/16/13)--Savings balances surged in the first quarter for New Jersey credit unions with normal, strong seasonal growth combining with large period-end payday inflows, the New Jersey Credit Union League reported.
As a result, both the state aggregate loan-to-savings and capital ratio declined marginally in the quarter (The Daily Exchange July 10). Loan delinquencies fell in the quarter and bottom-line earnings increased, compared with full-year 2012 results.
Savings balances rose 4.6%--an 18.4% annualized rate--propelled by increases in share-draft account automatic payday deposits. While loan activity was relatively slow (increasing 0.1% in the quarter), New Jersey credit unions granted a total of $570 million in loans in the first quarter. That is a 10% increase over first-quarter 2012 results and the largest first-quarter volume since 2008.
Earnings increased at an annualized rate of 0.48% in the first quarter--a significant jump over the 0.33% full-year 2012 result.
Fast asset growth due to big deposit inflows overwhelmed healthier earnings to produce a marginal decline in the New Jersey credit union aggregate capital ratio--though the March 2013 aggregate is nearly 3.5 percentage points above the 6% regulatory minimum credit unions need to be considered adequately capitalized under prompt corrective action (PCA) net worth standards, noted the league.
In all, 92% of the state's credit unions now are well-capitalized with PCA net worth exceeding 7% of assets, said the league.