LYNCHBURG, Va. (7/27/12)--Virginia-based credit unions advanced in virtually every aspect of their operations in the first quarter, with improved earnings and loan growth leading the surge.
"Virginia's credit unions continue their good work to serve the needs of their members," said Virginia Credit Union League President Rick Pillow. "The good news is that more consumers are discovering the benefits of credit union membership. With money to lend, better rates and service, and far fewer fees, credit unions are the consumer-friendly alternative to the nation's for-profit banks."
Virginia-based credit unions added 41,900 new members and 68,000 new share draft/checking accounts during the quarter. In the first quarter of the previous 10 years, the state's credit unions added an average of 26,000 new share draft/checking accounts.
During the six months ended March 2012, the state's credit unions added 141,000 new members, a rise fueled by Bank Transfer Day and positive media coverage throughout 2011.
Net income (return on assets) for state's credit unions was 1.21%, exceeding the national average of 0.83%. Virginia's first-quarter net-income figure reflected a four basis-point slip from the fourth quarter of 2011.
On the lending front, loan growth for the year ended March 2012, was fueled by spikes in credit card lending (12%), member business loans (MBL) (10%), and used auto loans (8%).
Nearly one-quarter of Virginia's 184 credit unions offer MBLs, representing balances of $810 million. Nationally, credit unions hold $39.7 billion in MBLs.
The Credit Union National Association (CUNA) and credit unions have been urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
Commercial banks still hold a majority of U.S. business loans, but the nation's credit unions are approving a higher percentage of loan applications, according to the Biz2Credit's small-business lending index.
Credit unions approved nearly 56% of such applications last month, compared with 47.5% approval among banks with less than $10 billion in assets. The study found bigger banks approved 11.1% of such applications.
Savings growth among Virginia credit unions continued to be concentrated in short-term, liquid accounts. Share draft/checking balances rose by 14% in the year ended March 2012, with regular shares and money market accounts logging 12% and 9% increases. Individual retirement account balances saw a small rise of 4% over the past year.
Virginia-based credit unions' delinquency and charge-off rates both stood at 1.08%. Delinquency and charge-off rates for state's banks are 2.48% and 1.96%, respectively.