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Southeastern credit unions grow members and loans in 3Q

Through three quarters of 2012, credit unions in Alabama and Florida are on pace to have their best financial year in quite some time. Southeastern credit unions are adding members at a record pace while making more member business loans and seeing delinquencies and net charge offs fall for three straight years. Through the first three quarters of the year, Alabama and Florida credit unions have added a collective 165,000 new members this year. In the third quarter alone, Florida credit unions added 35,000 new members and Alabama added 16,000. Both states have a record number of members – 4.7 million in Florida and 1.83 million in Alabama.

“Southeastern credit unions’ membership is growing at 2.5 percent, which is higher than the national credit union average,” said League of Southeastern Credit Unions President/CEO Patrick La Pine. “We’ve seen five straight quarters of record growth. Between the two states, nearly 250,000 new members have joined a credit union during this span. This is an unprecedented stretch of membership growth.”

Also growing rapidly are member business loans (MBL) in Alabama and Florida. Florida has grown its MBLs 7.9 percent through three quarters of 2012, while Alabama has grown its MBLs 7.6 percent. Each is well above the national credit union average of 5.7-percent growth. This also represents a more than five-percent increase in MBL growth over 2011. Breaking it down by quarters, in the third quarter Florida increased its MBLs 4.7 percent from the second quarter, while Alabama increased its MBLs by 3.3 percent.

As the economy picks up, members are finally taking out loans. Florida and Alabama credit unions saw a two-percent loan growth through three quarters of 2012. This is significant since loan growth was negative the past two years in both states.

Delinquent loans and net charge offs are improving with each quarter. In Alabama, delinquent loans are just above the national credit union average at 1.3 percent, while Florida delinquent loans are higher at 2.3 percent, but down considerably over the past three years (2.86 percent and 3.16 percent). Net charge offs in Alabama are below the national average at .65 percent, while Florida net charge offs are higher than the national average at 1.3 percent, but again well below the past three years (1.79 percent, 2.21 percent and 2.14 percent).

“More consumers need to know that credit unions have money to lend. There is a feeling in the marketplace that small businesses and consumers can’t get a loan,” said La Pine. “That’s simply not true at credit unions. They continue to market loans to consumers and the loans they are making are more quality in nature.”

Asset growth in Alabama and Florida has been torrid in 2012; collectively credit unions have added $3 billion in assets through the first three quarters. This is $500 million more than was added in all of 2011. Alabama credit unions are growing their assets slightly above the national credit union average and hold a record $17.6 billion in assets. In Florida, asset growth is slightly below the national average; however two years ago asset growth in Florida was in the negative. Credit unions in Florida hold $45.5 billion in assets.

The net-worth ratio for Alabama and Florida credit unions is very healthy. Alabama credit unions collectively have an 11-percent net worth ratio while Florida credit unions have a 10-percent net worth ratio for the first time in four years. A financial institution is considered well capitalized with a net worth ratio of seven percent.

“Overall you can see that 2012 is on pace to be the best year that credit unions in Alabama and Florida have had since the financial crisis hit in 2007,” said La Pine. “A number of factors are contributing to it, including an improving economy, a greater awareness of the benefits of being a credit union member, the LSCU Cooperative Image Campaign and the great marketing being done by individual credit unions.”   

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