The improving economy resulted in a continued strengthening in the performance of federally insured credit unions during the third quarter of 2012, according to Call Report data submitted to and compiled by the National Credit Union Administration (NCUA) for the period ending Sept. 30.
“Third-quarter statistics show the credit union industry continues to recover from the economic downturn,” NCUA Board Chairman Debbie Matz said. “Consumers increasingly chose credit unions as their financial services providers. Membership grew by almost 743,000 during the quarter, up nearly 2.1 million for the year. Ongoing growth in lending, continued declines in delinquencies and charge-offs, and strong net income year-to-date all demonstrate a strengthening economy. Moreover, the industry’s net worth ratio again jumped to end the quarter at 10.31 percent.”
Membership Growth Rate Rises
In July, August and September, ongoing gains in membership growth at credit unions accelerated. During the quarter, membership increased by 742,847 to 93.9 million, a quarterly growth rate of 0.8 percent. While membership rose, the overall number of federally insured credit unions declined from 6,961 to 6,888 as industry merger trends continued.
Credit Union Lending Expands for Sixth Quarter in a Row
For the third quarter of 2012, credit unions reported $591.1 billion in outstanding loans, $9.4 billion higher than the prior quarter. The third quarter’s 1.6 percent increase in lending nearly matches the 1.7 percent growth reported in the second quarter. Total loans by credit unions have now risen for six consecutive quarters, reflecting increased consumer demand.
The industry expanded lending in all but one category. New auto loans climbed 3.3 percent, used auto loans rose 2.7 percent, and loans for first mortgages increased by 1.3 percent. Non-federally insured student loans and leases receivable reported double-digit gains. Additionally, member business lending increased by 1.5 percent to $40.8 billion from $40.2 billion. The consumer-friendly payday alternative loan product grew by 5.2 percent to $17.3 million.