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News Now

CU System
Ohio CUs add 34000 members in 2010
COLUMBUS, Ohio (1/21/11)--For a seventh consecutive quarter, Ohio credit unions recorded gains in membership—they added 34,547 members in the 12 months between September 2009 to September 2010, according to the latest Ohio Credit Union Quarterly Performance Summary. The 1.3% increase during the 12-month stretch nearly triples the rate at which credit unions across the country added new members (0.48%) during the same time. Analysts attribute the growth to the continuing consumer shift from investing long-term to addressing immediate financial concerns. Like its neighbor state, Michigan, where credit unions have also experienced strong growth, Ohio’s overall economy has struggled mightily in the past decade, Dave Fearing, senior vice president of credit union support for the Ohio Credit Union League, told News Now. In the aftermath of the Wall Street crisis, where big banks were equated with higher risk, consumers may be seeking the local flavor of credit unions, he said. “The recent trend has been for consumers to consolidate, pay off debt, and focus on savings growth rather than incurring additional debt,” said Fearing. “As a result, credit unions have seen an increase in deposits as consumers look to gain the most out of their money through credit unions, which traditionally offer a higher rate of return. Consumers are also attracted to credit unions’ lower rates on credit cards and consumer loans, which helps them to pay off debt quicker.” Fearing’s analysis is supported by the Quarterly Performance Summary, which shows share balances at Ohio credit unions topping $18.1 billion in September 2010, an increase of 6.2% from September 2009. Money market balances grew the fastest, rising 16.8%. Share deposits saw the largest dollar increase, adding $1.1 billion Also, the average member relationship, or the total dollar amount of loan balances and deposits per member, increased 2.1% from $11,112 in 2009 to $11,346 in 2010. Member business lending continued to be the fastest-growing loan category among Ohio’s credit unions. As of September, 95 of Ohio’s 390 credit unions reported outstanding business loan balances, an increase of 22.6% over the previous September. Member business loan balances increased from $383 million from $333 million during the 12 months, a 15% increase, outpacing the national credit union average. Loan activity also increased among Ohio credit unions in the second half of 2010. In the third quarter alone, credit unions originated more than $1.4 billion in new loans, up 18.4% from activity in the second quarter. The largest driver of the increase was a 58.6% jump in quarterly first mortgage originations, driving the September 2010 total loan portfolio up 1.3% from June 2010. While balances are up on a quarterly basis, annual loan growth has turned negative. Balances are down 1.5% at credit unions nationally, while credit unions in Ohio saw their loan portfolio contract 0.36% during the 12-month stretch. The driver of the decline in balances is the auto loan market, said the league. While Ohio credit unions have historically reported above-average auto loan growth, and have avoided declining trends nationally, auto loan balances fell 2 % during the year. Used-auto loans increased 5.1%, while new-auto loans decreased 11.7%. Credit card balances grew 6.58% at Ohio credit unions during the 12-months, nearly doubling September 2009’s growth rate of 3.5%. Ohio credit union economic indicators remain positive overall, with capital levels at 11.7% on average, which is higher than Ohio banks and thrifts, and credit unions and banks nationally. Asset quality in Ohio remains strong, as the delinquency rate fell slightly to 1.34% in September 2010 from 1.37% the same month the year before.


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