CUs' Financial Performance a Mixed Bag for November
Rick was commenting on statistics released Thursday in CUNA's Monthly Credit Union Estimates report.
"Credit unions reported annualized earnings as a percent of assets (return on assets) of 93 basis points in November, higher than the 81 basis points reported over the last 12 months," Rick told News Now.
"Falling consumer confidence as a result of the fiscal cliff uncertainty kept many potential borrowers and spenders on the sidelines," he said.
What does this mean for credit unions? Rick says to "expect faster loan growth in 2013 (5%) now that households have more certainty regarding their tax bill because of the recent passage of the fiscal cliff legislation. Moreover, the fiscal resolution has led to surging stock prices which in turn could produce a "wealth effect" as consumers increase borrowing and spending and decrease savings.
Credit union assets surged 1.3% in November because the month ended on a payroll Friday, he said.
"The growth in assets outpaced capital growth, reducing credit unions' average capital-to-asset ratio to 10.4%. This is roughly where the ratio was one year earlier. So it appears credit unions are managing their year-over-year asset growth with their growth in capital," Rick said.
Loans for this past November fell by less than 0.1% from October's 0.4% growth. Unsecured personal loans increased 1.6% over October. New auto loans grew 0.8%, credit card loans grew 0.7% and adjustable-rate mortgages grew 0.2%. Used-auto loans slipped less than 0.1%. Credit unions' home equity loans were down 0.5% and fixed-rate mortgages dropped 1.4%.
Savings at credit unions totaled $899.2 billion, up from $836.1 billion a year earlier.
In November, their savings balances grew 1.3%, compared with 0.1% decrease in October. Share drafts led savings growth with a 7.4% increase, while regular shares grew 1.1%. One-year certificates and money market accounts grew 0.3%. Individual retirement accounts were down 0.1%.