MADISON, Wis.-Lending at credit unions continued a brisk pace during May, according to one new analysis that suggests lending will remain strong.
Data released by CUNA last week as part of its Monthly Credit Union Estimates show lending up by 0.54% during May, the fastest monthly increase since August of 2009 when Cash for Clunkers was in effect, noted Mike Schenk, CUNA's VP-economics and statistics. Through May credit union lending was growing at a 6.5% annualized rate.
"Loan growth outpaced the 0.21% growth in savings balances-2.5% annualized-in the month. As a consequence, the movement's aggregate loan-to-savings ratio increased from 67.1% in April to 67.3% at the end of May-the second straight month that reflected an increase," Schenk said in a statement released by CUNA.
Schenk is projecting that "seasonally strong borrowing" should keep lending volume strong over the next couple of months and provide an ongoing boost to credit union bottom lines as loans replace low-yielding investments.
Among the other data for May released by CUNA:
* Total CU loans were $592.7 billion in May, compared with $576.3 billion in May 2011. Lending was led by used-auto loans and ARMs, each up 0.8%.
* Asset quality as measured by the 60-plus-day delinquency rate declined slightly to 1.44% in May from 1.42% in April, the first such decline in four months. Schenk said he expects overall loan quality to continue to improve.
* ROA also declined slightly to an annualized rate of 0.83% in May from 0.96% in April to 0.83%. Through the first five months of 2012 CUs recorded 0.80%.
* Net-worth ratios increased to 10.15% at the end of May from 10.11% in April.
* Credit union savings in April totaled $880.9 billion, with savings balances up 0.2% for the month vs. 0.6% in April.
* The CU average loan-to-savings ratio remained constant in May at 67%, with the liquidity ratio-the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-fell to 19% in April from 20% in March.
* The overall capital-to-asset ratio remained at 10%.
* Total membership passed 95 million for the first time.