Credit union lending rises in 2nd quarter

Credit unions increased their lending in the second quarter for the first time in four quarters, according to reports submitted by the nation's 7,239 federally insured credit unions and released by the National Credit Union Admininstration.

Loans rose 0.7 percent to $564.0 billion from $559.9 billion in the first two quarters of 2010.

At the same time that credit unions were increasing loan volume due to short-term loans as an alternative to "pay day" lending, reports from the Federal Deposit Insurance Corp. show that bank lending continued to decline.  Since June 2008, the volume of loans outstanding has fallen in 10 of 11 quarters, and the only reason it grew during the first quarter last year was because of an accounting change.

All told, bank lending has declined nearly 9 percent since March 2008, according to an analysis by the Investigative Reporting Workshop.

Net income for the nation's credit unions increased 10.7 percent from last quarter, totaling $3.58 billion for 2011 to date. Net worth, which is a credit union measurement of capital, increased 2 percent this quarter to $95.6 billion from $93.7 billion through the same period last year.

Assets of the nation's federally-insured credit unions rose 0.3 percent to $942.5 billion from $939.3 billion on June 30, 2010. Shares, the credit union equivalaent of deposits, increased 0.1 percent to $812.2 billion from $811.7 billion at the end of the second quarter of 2010.

In Iowa, the state's largest credit unions experienced loan growth when compared with the first six months of 2010.

Veridian Credit Union of Waterloo, with offices in the Corridor, increased total loans from $1.25 billion on June 30, 2010, to $1.29 billion on the same date this year. Net income rose 2.7 percent to $14.5 million from $13.7 million in the same six months of 2010.

University of Iowa Community Credit Union in Iowa City, also with offices in the Corridor, experienced a 9 percent jump in loan volume to $1.1 billion in the first six months of 2011 from #879.8 million in the same period of 2010. Net income slipped 5.1 percent to $8.9 million from $9.5 million in the first half of 2010.

Dupaco Community Credit Union of Dubuque, the third-largest Iowa credit union by assets, grew its loan volume 2.2 percent to $449.2 million on June 30 from $414.3 million on the same date in 2010. Net income rose 9.4 percent to $9 million on June 30 compared with $3.9 million on June 30, 2010.

Collins Community Credit Union in Cedar Rapids experienced a 2.6 percent increase in loan volume to $468.8 million on June 30 from $424.5 million on June 30, 2010. Net income edged up 0.3 percent to $3.9 million at the end of the second quarter from $3.6 million on June 30, 2010.

NCUA Board Chairman Debbie Matz said  loan delinquencies remain near historically high levels, but they continue to trend downward. In the second quarter, credit unions reported a loan delinquency ratio of 1.58 percent, a 5 basis point improvement from the prior quarter.

Similarly, the net charge-off ratio declined to 0.95 percent in the second quarter, a drop of 5 basis points from the end of March.

Credit unions also reported 76,720 members filing bankruptcy in the second quarter, a 13.1 percent drop compared with first quarter filings. The percentage of loans charged off due to bankruptcy rose slightly to 24.17 percent through June 30, while the change in outstanding loans subject to bankruptcy dropped by 30.9 percent since the prior quarter-end.