4th Quarter Trends Remain Strong

Given rising US unemployment, an ongoing war in Afghanistan, record bankruptcies, and the general economic uncertainty, the question might be asked Can the credit union industry's run of double digit growth continue? Preliminary data indicates that US credit unions were able to maintain double-digit annual growth rates in the fourth quarter of 2001.

 
 

Given rising US unemployment, an ongoing war in Afghanistan, record bankruptcies, and the general economic uncertainty, the question might be asked "Can the credit union industry's run of double digit growth continue"? Preliminary data indicates that US credit unions were able to maintain double-digit annual growth rates in the fourth quarter of 2001.

Due to participation by credit unions across the US in Callahan & Associates' First Look program, we are able to provide a preliminary read on fourth quarter trends. Participating credit unions represent $116.3 billion in total assets, $77.3 billion in loans, and $101.2 billion in shares. These assets account for 24.0% of the industry's $485.0 billion total assets as of June 2001.

Contrary to the US economy, annual growth for credit unions has steadily improved. As shown in the exhibit below, US credit unions have experienced double-digit annual growth rates in assets and capital in all five time periods and returned to double-digit annual loan growth in 4th quarter 2001. With the exception of the 2nd quarter, annual membership growth has steadily increased.
The most dramatic growth over the last 12 months is in shares, which rose 18.8% and resulted in higher liquidity across the industry.

Solid financial performance has continued as well for the industry. Credit unions maintained a 0.6% delinquency ratio in the 4th quarter, well within historical ranges, and managed to raise ROA to 1.1%, which is 8 basis points higher than 3rd quarter results. The exhibit also shows that, although there was a slight decline in both ratios, credit unions maintained a loan/share ratio and a net worth/assets ratio (formerly capital/assets) close to those of previous periods, 76.4 % and 10.4%, respectively.

The NCUA will provide final industry figures in early March, but the figures provided by the First Look program indicate that the credit union system is strong and continues to experience double-digit growth. The macro trends indicate no dramatic change of direction in performance. US credit unions continue to be viewed by members as a highly valued financial partner during these uncertain economic times.

 

 

 

Jan. 28, 2002


Comments

 
 
 

No comments have been posted yet. Be the first one.