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California CUs see slight growth in second quarter
SACRAMENTO, Calif. (9/8/08)--Credit unions in California experienced slight growth in total assets, loans, shares and capital during the 12-month period ended June 30, announced the California Department of Financial Institutions (DFI). They also experienced higher delinquencies. The state regulator's quarterly report, released Thursday, said assets for credit unions in the state were up 3.5%--to $73.3 billion from the $70.8 billion reported for the same period ended on June 30, 2007. Loans and shares each rose 2.5% during second quarter 2008. Loans were up to $51.8 billion from $50.6 billion, while shares grew to $61.6 billion from $60.1 billion. Members' equity declined 1.7%, to $7.4 billion from $7.5 billion. DFI said this caused credit unions' overall capital to asset ratio to decrease to 10.12% from mid-2007's 10.66%. The allowance for loan losses grew 68%, to $519 million from $309 million. The number of credit unions declined 4.5%--to 193 from 202. Net margin to average assets decreased 12.5% to 3.51% from 4.01% at the end of second quarter 2007. The provision for loan losses more than doubled to $349.6 million from $143.8 million. For the first six months of 2008, net income declined from $225 million in 2007 to a net loss of $132.9 million--a 159% drop of $357.9 million. Delinquent loans for credit unions in the state were up 88.8%--to $531.2 million from $281.3 million, an increase of $249.8 million. How do California's banks compare? State-chartered commercial banks reported $406.7 million in losses--off $1.7 billion or 130.9% from the $1.3 billion in net income they reported for the period in 2007. DFI said this was partly due to a 619.6% increase in loan loss provisions--to $1.2 billion from $163.1 million last year. Loan loss reserves for commercial banks were up 68% but noncurrent loans more than doubled to $3.3 billion from $853.8 million. That caused reserve coverage of noncurrent loans to decrease to 75.60% from 205.53%. Other real estate owned also more than doubled to $255.3 million from $43.1 million. DFI said the banks' assets were up 7.4% to $230.5 billion and loans were up 10.4%. Deposit growth increased 4.3% to $158.7 billion. That caused the loan to deposit ratio to increase to 105.73% from 99.89% for the period in 2007. Equity capital to total asset ratio also declined to 11.69% from 13% for the banks, said the regulator. More information can be found on the financial statistics page of the agency's website. Use the link.
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