COLUMBUS (7/11/12)--Ohio credit unions' consumer-loan origination growth increased 37% year over year during the first quarter to $972 billion, outpacing the national average, said to the Ohio Credit Union League.
Consumer loans were a primary driver of that growth, rising 33.7% during the quarter to $1.5 billion, according to the league's Ohio Credit Union Quarterly Performance Summary.
Loan balances increased 4.7% over the previous 12 months at Ohio credit unions, more than double the national rate of 2.1%. Every component of loan originations posted an increase over the previous first quarter, the league said.
"Growth in consumer lending is a positive sign, not just for credit unions, but for the continued recovery of the economy as a whole," said Paul Mercer, league president. "It is also a sign that credit unions are helping their members manage difficult financial circumstances by offering affordable loan products that make sense for the consumer."
First-mortgage originations also were above levels reported in the first three months of 2011. Ohio credit unions originated $443 million in first mortgages in the first quarter of 2012, up 34.6% from 2011. First mortgages outstanding grew 4% annually to reach $4.3 billion at Ohio credit unions. Also, Ohio credit unions sold $202.3 million in first mortgages to the secondary market in the first quarter.
Auto loans grew 8.9% in the first quarter. Nationally, auto loan balances increased at a 2.6% annual rate. Used auto loan balances in Ohio increased 10.1% annually, while new auto balances rose 6.7% during the same time.
Credit card balances also posted annual growth, with balances growing 4% to $752.4 million at the end of the first quarter.
Business loan balances in Ohio grew 13.7% from the previous March, which is faster than the national average of 8.4% for the period. Outstanding business loan balances stood at $439.7 million at the end of the first quarter.
With business loan demand remaining strong, originations increased from levels reported in the previous March. During the first quarter, Ohio credit unions originated $29.9 million in business loans, up 5.4% from the $28.4 million in originations reported during the first quarter of 2011.
Although it represents just 3.4% of the Ohio loan portfolio, member business lending is becoming an increasingly important part of Ohio credit unions' product offerings, said the league. In the first quarter, 107 of Ohio's 374 credit unions reported outstanding business loan balances.
The Credit Union National Association (CUNA) and credit unions are urging the U.S. Congress to increase credit unions member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said
Ohio credit unions added nearly 7,400 members during the past 12 months, with more than 4,000 of those members joining in the first quarter. This adds up to annual growth of 27 basis points, slower than the national average of 1.9%.
The rate of mergers and liquidations in Ohio during 2011 was below historical rates, with 10 credit unions in Ohio undergoing a merger or liquidation. The first three months of 2012 have shown a similar pace to 2011. During the first quarter, three credit unions merged.