BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (12/15/11)--Credit unions in Alabama and Florida experienced higher than normal membership growth in the third quarter, following the League of Southeastern Credit Unions' (LSCU) Statewide Image Campaign in September and the backlash against banks for suggesting a $5 fee for debit card use.
Southeastern credit unions added 48,000 members in the third quarter--31,000 in Florida and 17,000 in Alabama. Florida credit unions averaged 12,000 new members in the first two quarters of 2011, while Alabama credit unions averaged 8,000. This equates to 76,000 new members year over year for Southeastern credit unions from 2010 to 2011with another quarter yet to report.
"The LSCU Statewide Image Campaign hit at the exact right time," said LSCU President/CEO Patrick La Pine. "The campaign debuted Sept. 7, which was two weeks before the bank fees were announced and before the Bank Transfer Day buzz. It set the stage for consumers to begin looking at a credit union. We can clearly see the jump in numbers. Consumers are moving to a financial institution that has their best interest in mind."
As credit unions saw new members opening accounts, they also experienced a jump in assets. Southeastern credit unions have added $1.4 billion in total assets year over year in 2011 with another quarter yet to report.
The largest jump came for Alabama credit unions, which saw $1.3 billion in assets added, while Florida saw $159 million in growth. Alabama's assets have grown $4.4 billion since 2007. For Florida credit unions, the 0.4% growth indicates that the economy is slowly showing signs of improvement, said LSCU. Asset growth was negative in 2010.
Florida credit unions reported 2.2% growth in member business loans (MBLs), which is almost double the growth rate for 2010. Alabama credit unions saw a 1.5% growth in MBLs. There is pending legislation in Congress to lift the MBL cap for credit unions to 27.5% of assets from 12.25%. The Credit Union National Association, leagues and credit unions have been urging Congress to adopt that legislation.
"We are seeing the need for member business loans and we're seeing where our credit unions want to make them," said La Pine. "However, this arbitrary cap is keeping many credit unions from actively pursuing them. The need is great right now and there is literally no reason why Congress would not pass H.R. 1418 or S. 509. By raising the cap, Congress would infuse $785 million into the Alabama and Florida marketplace. The best part is that it would not cost the taxpayers one penny."
For the third consecutive quarter, Alabama and Florida credit unions reported delinquent loans to loans and net charge-offs to loans as improving. Alabama credit unions had a 14 basis-point decline in delinquent loans to loans in 2011, compared with 2010. This is well below the national credit union average, said LSCU. Florida's delinquent loans improved by 30 basis points. This is still above the national credit union average, but a major drop from 2009 and 2010.
Net charge-offs in Alabama dropped 12 basis points in 2011, compared with 2010. It's also shaping up as the best year for net charge-offs since 2007. In Florida, net charge-offs show a 33 basis points improvement in 2011 from 2010. That is the best net charge-off improvement since 2008, LSCU said.
Credit union members continue to save at rapid rates. Alabama members' savings grew at a rate of 8%, twice the national credit union average, and 3% higher than in 2010. In Florida, members' savings grew 2%. That is below the national average, but reverses the 2010 numbers, which showed negative growth.
These all are signs that the economy is slowly improving in the Southeast, LSCU said.
LSCU represents 300 credit unions in Alabama and Florida with $59 billion in assets and more than 6.4 million members.