Michigan's credit unions continued to strengthen their financial positions in the third quarter ending Sept. 30, with strong earnings and growth in membership (54,000 new members since year-end 2009). Third-quarter statistics from the National Credit Union Administration (NCUA) and the Credit Union National Association highlight the continued deposit growth (7.3 percent for the 12 months ending Sept. 30, 2010), business loan growth (22.9 percent), and strong return on assets (ROA - up to 34 basis points from 28 at mid-year).
"As Michigan's economy begins to recover, credit unions continue to grow and lend to small businesses and consumers," says David Adams, CEO of the Michigan Credit Union League & Affiliates. "The third quarter saw improvement for credit unions' already strong financial indicators, allowing our industry to continue to support the state's economy through lending."
Michigan continues to have the highest percentage of credit union membership among the ten most populous states, at 44 percent. In the third quarter alone, nearly 40,000 residents moved their money to a local credit union, bringing total credit union membership in the state to 4,488,110.
* Michigan's credit unions showed stronger than expected return on assets of 0.34 percent, despite high loan losses resulting from a challenging economy, and continuing loan and deposit growth.
* The net worth to assets ratio, a key measure of financial strength, shows Michigan credit unions held steady in the third quarter at 10.8 percent, higher than the national credit union average (10.0 percent).
* As FDIC-insured institutions pulled back on lending (down 8.0 percent), Michigan credit unions still showed positive loan growth (0.7 percent) for the 12-month period ending September 30. Specific areas of growth included used auto loans (up 9.9 percent), first mortgages (up 2.9 percent) and credit cards (up 4.2 percent).
* For the 12 months ending September 30, commercial business loans (member business lending) by credit unions showed strong growth, up 22.9 percent, while the national growth rate for credit unions was 6.9 percent. For Michigan banks, commercial lending declined by 3.1 percent through September. Nationally, commercial lending by banks declined by 7.8 percent during the period.
* Credit union deposits grew by 7.3 percent through the 12 months ending Sept. 30; including 17.6 percent growth in money market account balances, as consumer seek the safety and higher rates offered by credit unions.
* Michigan credit unions also continued making real estate loans (up 0.2 percent), while banks cut back (down 8.6 percent in Michigan, down 5.0 percent nationally) for the 12 months ending Sept. 30.
Adams notes that credit unions encourage saving and responsible borrowing with programs such as Save to Win, in which members make a $25 deposit for the chance to win monthly cash prizes and a yearly grand prize of $100,000. The program helps people save money instead of spending it on lottery tickets, for example. So far in 2010, more than 15,900 Michigan credit union members have saved a total of $21.3 million. The annual $100,000 grand prize drawing will take place in January.
"Credit unions continue to serve the needs of their community and members by investing in local businesses and encouraging prudent financial behavior," says Adams. "Despite chronically high unemployment in Michigan, community-based credit unions continue to contribute to the state's economic recovery and provide financial security and stability for nearly 4.5 million citizens."
Published: Thu, Dec 16, 2010
