Third Quarter Loan Growth Triples Share Growth in Top State

Wisconsin credit unions posted stronger earnings, capital and asset quality in the third quarter, while seeing loans grow at three times the rate of shares. Wisconsin continues to be the national leader in loan-to-share ratio, and the statewide average rose to 85.2% at the end of the third quarter, well above the 70.9% national average, on 2.7% loan growth for the three-month period. This pace is up from the state’s 2.2% growth rate recorded in third quarter 2001. The state’s average loan balance exceeded $8,500 for the first time ever on the strength of this growth, while loan quality improved from midyear as the delinquency ratio fell 5 basis points to 1.02%.

 
 

Wisconsin credit unions posted stronger earnings, capital and asset quality in the third quarter, while seeing loans grow at three times the rate of shares. Wisconsin continues to be the national leader in loan-to-share ratio, and the statewide average rose to 85.2% at the end of the third quarter, well above the 70.9% national average, on 2.7% loan growth for the three-month period. This pace is up from the state’s 2.2% growth rate recorded in third quarter 2001. The state’s average loan balance exceeded $8,500 for the first time ever on the strength of this growth, while loan quality improved from midyear as the delinquency ratio fell 5 basis points to 1.02%.

Business loans posted the highest growth rate among lending categories, rising 5.3% between June and September. This is a key activity for many Wisconsin credit unions as the state’s $463 million business loan portfolio is the third largest in the country despite being the 12th largest state by total assets. Royal Credit Union in Eau Claire is the largest credit union business lender in the state and fifth largest in the country.

Strong earnings among Wisconsin credit unions resulted from a slight decline in the cost of funds, expenses being held in check and investment yields improving due to a greater proportion of longer maturity instruments. Annualized return on assets reached 1.20% for the first nine months of the year, up from 1.11% at midyear. The increased earnings and slower share growth led to a rise in the net worth to assets ratio to 10.7% at the end of September.

With all credit unions filing third quarter call report data for the first time and a record number of participants in Callahan’s First Look program, we are able to measure third quarter performance for 311 of Wisconsin’s 313 credit unions. All but one of these 311 credit unions are state chartered, combining to represent over 99% of the state’s $11.8 billion in assets.

Key performance measures for the 10 largest Wisconsin credit unions and the state are shown in the table below. To participate in Callahan’s First Look program and start benchmarking your credit union’s performance as soon as call reports are filed, click here.

 

 

 

Nov. 11, 2002


Comments

 
 
 

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