Preliminary Year-End Data Show Credit Union Loan Growth Picks up in 2002

Early year-end data show credit union loan growth for 2002 surpassing last year's rate, while share growth for the year will come in slightly below last year's strong pace.

 
 

Early year-end data show credit union loan growth for 2002 surpassing last year's rate, while share growth for the year will come in slightly below last year's strong pace.

These credit unions show share growth of 12.1% for 2002, below last year's 14.7% rate, while loan growth reached 8.7% for the year, well above the industry's 6.7% rate in 2001. However, it is important to note that these 549 credit unions have generally outperformed the rest of the industry throughout the year, so the overall industry numbers will likely come in below these figures. In 2001, this group grew shares 18.2% and loans 10.7%.

The data, submitted by credit unions participating in Callahan & Associates' First Look program, is from 549 credit unions with a combined $139.6 billion in assets, representing approximately 25% of industry assets. Credit unions contribute the data that make up Callahan's First Look industry snapshot, which tracks credit union trends weeks before final reports are available. The participating credit unions have access to general industry trends as well as individual credit union call reports. Early indicators like this have provided accurate insight into the industry's final results in past quarters, Callahan records show.

For the first time since the first quarter, share growth outpaced loan growth. The participating credit unions grew shares an impressive 2.6% in the final quarter, while loans increased 2.3%. In the third quarter, these same credit unions grew loans 2.6% with shares increasing 2.3%.

With another year of share growth outpacing loan growth, it was important for credit unions to make a good yield on their investment portfolio. Of the preliminary credit unions, the top five over $50 million in assets with the best yield on investments for 2002 are listed in the table below. First Resource Federal Credit Union of Michigan came in first with a 5.66% yield.

As an industry, credit unions continue to be financially sound. The preliminary data show the net worth to assets ratio staying steady at 10.0%. The delinquency ratio also remains stable at a low 0.6%.

The slight pick up in share growth and the very low cost of funds resulted in First Look credit unions' return on assets (ROA) declining to 1.22% from 1.24% in the third quarter.

''The pick up in loan growth this year has allowed credit unions to turn more of their deposits into higher paying loans instead of lower paying investments,'' says Callahan Executive Vice President Jay Johnson. ''With higher returns, strong asset quality, and a solid capital base, credit unions are recording another stellar year.''

Credit unions participating in First Look represent a very wide range of asset sizes from Vestal Employees Credit Union in Missouri with $151,844 in assets to Navy Federal Credit Union which now holds over $17.5 billion in assets. Any credit union can participate in Callahan's free First Look program every quarter by emailing their 5300Data-Charter#.XML file to 5300@callahan.com.

 

 

 

Feb. 3, 2003


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