Deposits and Investments Continue Growth in 1st Quarter - Still Searching for Loans

Credit union share growth continued to outpace loan growth in the first quarter of 2003. Credit unions grew share dollars 5.5% in the first three months compared with a relatively sluggish 0.6% increase in loans in the same period. As individuals paid down some of their holiday debt, total unsecured loan balances declined 5%. That there was positive growth in loans at all is due to first mortgage loans.

 
 

Credit union share growth continued to outpace loan growth in the first quarter of 2003. Credit unions grew share dollars 5.5% in the first three months compared with a relatively sluggish 0.6% increase in loans in the same period. As individuals paid down some of their holiday debt, total unsecured loan balances declined 5%. That there was positive growth in loans at all is due to first mortgage loans.

Key 1st quarter performance measures:
# of Credit Unions: 9,810
Assets: $598.2 billion
Membership: 83 million
ROA: 1.04%
Net Worth/Assets: 10.45%
Op Exp/Avg Assets: 3.17%
Net Interest Margin: 3.42%
Delinquency: 0.74%

The $3.8 billion increase in first mortgage loans outstanding is nearly double the increase of the loan portfolio as a whole. And this increase came, despite the credit union industry selling over $9 billion of mortgages on the secondary market, a 72% increase over the first three months of 2002, which was a record year for mortgage sales.

This discrepancy in balance sheet growth rates dropped the loan to share ratio more than 3 percentage points to 67.4%. This also left $27.9 billion available for investments, a 14.5% growth in investments in just three months. As the graph below demonstrates, $17.5 billion of those new investment dollars went very short as cash on deposit.

 

 

 

 

June 2, 2003


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