Michigan Credit Unions Grow Deposits, Small Business Loans in 2nd Quarter (Misc News: September 6, 2011)
Credit unions in Michigan continue to expand member services and fuel small business growth, according to the NCUA. Data for the second quarter, which ended June 30, shows an increase in deposits and in multiple loan categories for credit unions.
“The continued growth in credit union deposits shows that consumers are looking for a safe alternative to the volatile stock market for their savings,” MCUL & Affiliates CEO David Adams said. “Credit unions provide a trusted alternative. Continued steady growth in deposits coupled with slow loan growth shows households are saving more and borrowing less. While bad for the economy in the short run, this is exactly what people should do to plan for the future.”
Credit unions showed improvement in consumer deposits, several loan categories and in critical measures of financial strength:
- Growth of $1.87 billion, or 4.72 percent, in credit union assets, which now stand at $41.4 billion. By comparison, Michigan-based bank assets dropped 4.5 percent.
- Strong growth in small business loans, which were up $171.5 million or 18.8 percent to $1.09 billion, while banks' small business loans dropped 10.1 percent.
- Used auto loans were up 8.33 percent, as credit unions have added $337 million and brought the total outstanding to $4.39 billion.
- Total deposits are up 5.2 percent with savings accounts and money market accounts leading the growth at 11 percent and 9.84 percent, respectively. During the same period, Michigan bank deposits fell by 3.5 percent.
- Credit union ROA has jumped nearly half a percent to 0.74 percent, on an annualized basis.
- The overall net worth ratio, the primary measure of financial strength, improved slightly from 10.64 percent to 10.71 percent over the past 12 months, well above the 7 percent credit unions need to be considered “well-capitalized” by regulators.
- Delinquent loans are down from 1.81 percent of total loans to 1.53 percent.
- Michigan credit unions statewide have added 194 employees in the past year.
“Credit unions continue to show very strong growth in small business loans at a time when banks are less able to lend,” Adams said. “Small businesses continue to struggle with access to low-cost capital and credit unions are providing a good alternative for certain types of small business loans.”