HARRISBURG, Pa. (1/27/14)--Pennsylvania credit unions are expected to experience a strong lending marketing in 2014--possibly the most robust environment in seven years--as accelerated economic growth and increased job creation will drive consumer borrowing, the Pennsylvania Credit Union Association reported.
In the third quarter of 2013, loan balances at Pennsylvania credit unions increased 2.8%, up from a 1.9% rise in the third quarter of 2012, according to the Pennsylvania Profile Third Quarter 2013 (Life is a Highway Jan. 24).
Member business loans and other unsecured loans were the fastest rising lending sectors, increasing 4.6% and 3.6%, respectively. Home equity loan and second-mortgage loan balances posted a gain of 2.5%.
Meanwhile, first mortgage loan balances rose 2.7%, similar to the 2.8% pace set in the third quarter of 2012, even in the face of higher mortgage interest rates. Credit card loan balances rose 3.1% as spending on durable goods picked up.
Over the last 12 months, savings balances are up 2.6%, while loan balances are up 4.4%, increasing the loan-to-savings ratio to 65.3% from 64% at the end 2012.
Loan delinquency rates for Pennsylvania credit unions were significantly lower than bank-reported rates. The credit union rate for more than 60 days was 1.09% in the third quarter, compared with 1.40% reported by Pennsylvania banking institutions.
The net charge-off ratio for credit unions fell to 0.53% in the third quarter--from 0.56% in the second quarter, and two basis points lower than one year earlier.
Pennsylvania credit unions reported strong net membership growth in the third quarter, rising 0.8%, identical to the 0.8% pace set one year earlier. Net memberships grew by 23,000 in the third quarter to reach 3,769,000.