Given rising US unemployment, an ongoing war in Afghanistan, record bankruptcies,
and the general economic uncertainty, the question might be asked "Can the credit
union industry's run of double digit growth continue"? Preliminary data indicates
that US credit unions were able to maintain double-digit annual growth rates
in the fourth quarter of 2001.
Due to participation by credit unions across the US in Callahan & Associates'
First Look program, we are able to provide a preliminary read on fourth quarter
trends. Participating credit unions represent $116.3 billion in total assets,
$77.3 billion in loans, and $101.2 billion in shares. These assets account for
24.0% of the industry's $485.0 billion total assets as of June 2001.
Contrary to the US economy, annual growth for credit unions has steadily improved.
As shown in the exhibit below, US credit unions have experienced double-digit
annual growth rates in assets and capital in all five time periods and returned
to double-digit annual loan growth in 4th quarter 2001. With the exception of
the 2nd quarter, annual membership growth has steadily increased.
The most dramatic growth over the last 12 months is in shares, which rose 18.8%
and resulted in higher liquidity across the industry.
Solid financial performance has continued as well for the industry. Credit
unions maintained a 0.6% delinquency ratio in the 4th quarter, well within historical
ranges, and managed to raise ROA to 1.1%, which is 8 basis points higher than
3rd quarter results. The exhibit also shows that, although there was a slight
decline in both ratios, credit unions maintained a loan/share ratio and a net
worth/assets ratio (formerly capital/assets) close to those of previous periods,
76.4 % and 10.4%, respectively.
The NCUA will provide final industry figures in early March, but the figures
provided by the First Look program
indicate that the credit union system is strong and continues to experience
double-digit growth. The macro trends indicate no dramatic change of direction
in performance. US credit unions continue to be viewed by members as a highly
valued financial partner during these uncertain economic times.