Michigan CUs Grow Members, Branches and Deposits (Misc News: June 11, 2011)
Michigan credit unions grew in members and branches in the first quarter of 2011, according to an MCUL press release. The data also shows strong deposit growth, especially in the area of checking account activity. Most credit unions in Michigan still offer free checking accounts despite many new fees being added to checking accounts by larger banks.
Numbers compiled from the NCUA call data show:
- Deposit growth was a very strong 15.6 percent (quarter growth annualized) compared to 6.4 percent in the fourth quarter of 2010.
- Credit unions’ free checking accounts grew by a rate of 22 percent (quarter growth annualized) while typically lower-balance savings accounts grew by a whopping 41.6 percent (quarter growth annualized) compared to 7.2 percent in the fourth quarter of 2010.
- Credit unions grew their total employees statewide by 193 to 12,814 compared to 12,621 one year prior (3/31/2010) and total branches grew from 1,044 to 1,064 during the same period.
- Small business loans continued to grow despite enormous pressures on all types of lending in Michigan. Credit unions’ small business loans surpassed $1 billion for the first time with growth of 10.7 percent (quarter growth annualized) compared to a similar growth rate of 9.6 percent in the fourth quarter of 2010.
- Total credit union membership continued to grow to 4,474,241, up 42,000 from one year prior, despite the state’s shrinking population. Michigan continues to enjoy the highest membership/population penetration (45 percent) of any of the 10 most populous states in the country.
“Consumers continue to see credit unions as a trusted, safe haven for their money despite the low-interest environment,” MCUL & Affiliates CEO David Adams said. “The growth in checking accounts, total membership and small business loans is particularly gratifying. Our state needs affordable basic financial services and access to business capital. Credit unions are the price and service leaders and people are responding to that in record numbers.”
Credit unions also showed improvement in virtually all financial performance metrics that cover capital strength, earnings and liquidity. Highlights include:
- Net worth/total assets stood strong at 10.56 percent, off slightly from 10.72 percent in December 31, 2010, due to the effect of strong deposit growth.
- Delinquent loans/total loans continued to improve with an overall delinquency rate of 1.60 percent compared to 1.75 percent in December 31, and down from 1.82 percent at March 31, 2010. Likewise, net loan chargeoff losses also continued trending downward to 0.92 percent compared to 1.19 percent in December and 1.17 percent one year earlier (March 31, 2010).
- Net earnings, expressed as a percentage of average assets (ROA) improved to .79 percent, up from .55 percent in December and up from .32 percent at March 31, 2010. Strong earnings are important so that credit unions can build net worth in order to be strong enough to lend in down economies.
- Liquidity, expressed as the percentage of assets held in total loans (Loans/Assets) stood at 55.3 percent, down from 58 percent in December and 58.9 percent at March 31, 2010. This built up liquidity represents money available to lend for consumer and business loans. Total credit union investments (money available to lend) grew to $12.7 billion, up from $10.6 billion one year earlier (March 31, 2010).
“Credit unions are strong and healthy, flush with capital to lend,” Adams said. “The challenge is in finding good loans where consumers and businesses can meet the more stringent regulatory requirements on lending. Credit unions are stretching to lend more than any other type of financial institution and they are well positioned to help Michigan’s economy moving forward.”