Home > Pressroom > News Release: CUs Add New Members

For Immediate Release Contact: Patrick Harris Director of Media Relations Ohio Credit Union League pharris@ohiocul.org 800-486-2917

Ohio Credit Unions Add More Than 28,000 Members in 12 Months
54,200 checking accounts added since June 2011; Loan originations increase 35%

Columbus, Ohio (October 15, 2012) According to the latest Ohio Credit Union Quarterly Performance Summary, an increased anti-bank sentiment among consumers helped Ohio credit unions boast another strong economic performance, particularly in membership, deposit account, and loan growth. The second-quarter report, which analyzes data from June 2011 to June 2012, reveals Ohio credit unions added more than 28,000 new members during the 12-month period, 54,200 checking accounts, and a 35% rise in loan originations.

“Credit unions offer products and services that benefit members, not shareholders, and the membership growth statistics clearly demonstrate that consumers realize this more than ever,” said Paul Mercer, Ohio Credit Union League President. “From an economic standpoint, it is encouraging to see an increased demand in consumer loans, which indicates Ohioans are again becoming comfortable enough to start to use credit. We haven’t experienced this in the last few years, with consumers focused on paying down debt. If they now need loans, we are ready to serve their needs.”

Loan Originations Driven by Consumer Loans; Renewed Growth in Auto Loans; Asset Quality Improves
First-mortgage originations through June 2012 were strongly above levels reported in the first six months of 2011. Ohio credit unions originated $1 billion in first mortgages during the first half of 2012, up 68.8% from 2011. First mortgages outstanding grew 6.3% annually to reach $4.5 billion at Ohio credit unions. In addition, Ohio credit unions sold $382.7 million in first mortgages to the secondary market in the first six months of 2012. Every component of loan originations, except member business loans, posted an annual increase in June.

New vehicle sales are back on the rise, up 18.3% from June 2011, which translated to growth in the credit union new auto portfolio for the first time since third quarter 2007, despite heightened competition from captives. Ohio credit unions have historically reported above-average auto loan growth, and balances rose by 11.1% in the second quarter. Used auto loan balances in Ohio increased 10.9% annually, as new auto balances rose 11.4% during the same time. Credit union market share of auto loans in Ohio was 13.8% through June.

Asset quality continued to improve as the delinquency rate fell 13 basis points annually to 1.07% at the end of the second quarter. Delinquency in Ohio remained below the national average of 1.21%.

Credit Union Membership and Member Relationship
Despite adding 28,000 new members, Ohio credit union membership growth was slower than the industry average of 2.3%. Membership has grown at a compound annual growth rate of 49 basis points over the past 5 years. Increased anti-bank sentiment helped credit unions across the country and in Ohio capitalize on opportunities for adding new members. Credit unions nationally saw the highest-ever annual growth in share draft accounts in 2011 with 1.8 million new checking accounts, including 54,200 in Ohio as mentioned.

As members, loans, and shares continue to increase, so too has the average Ohio member relationship, up to $12,293 at the end of the second quarter. This metric, representing the total dollar amount of loan balances (excluding member business loans) and deposits per member, increased 5.9% from the $11,603 reported in June 2011. This suggests that members are utilizing their local credit union more often, and when coupled with the continued increase in members, points toward a positive future for the area’s credit unions. Factors that can contribute the average member relationship include competitive rates, employed membership, and loan and deposit product variety. A credit union’s ability to market and sell loan and deposit products can also have a measurable impact on the average relationship per member.

Business Loan Balances Grow 12.3%; Small Business Lending Slows
Business loan balances in Ohio grew 12.3% from the previous June, which is faster than the national average of 8.3% during the same period. Outstanding business loan balances stood at $456.2 million at the end of the second quarter. Business loan originations decreased from levels reported the previous June. During the first six months of 2012, Ohio credit unions originated $62.8 million in business loans, down 92 basis points from the $63.3 million in originations reported during the first half of 2011.

Although it represents just 3.4% of the Ohio loan portfolio, member business lending is becoming an increasingly important part of a credit union’s suite of products. In the second quarter, 106 of Ohio’s 370 credit unions reported outstanding business loan balances.

Credit Unions Consolidation Pace Faster Than Previous Year
Ohio credit unions are on a faster merger pace than in 2011. With seven mergers in the first half of 2012, Ohio is on pace for 14 mergers for the year, which is close to historical consolidation rates.

What is a Credit Union?
Credit unions are not-for-profit, democratically-controlled, cooperative financial institutions.  Members of credit unions are owners, and each member-owner has an equal say in the operations of the credit union.  Almost all Ohioans are eligible to join a credit union. To find a credit union, visit www.aSmarterChoice.org.

 -30-

The Ohio Credit Union League, with offices in Columbus, is a state trade association representing 382 credit unions. Credit unions are not-for-profit financial institutions owned and democratically-controlled by their members. Ohio credit unions provide savings, loans, and other consumer financial services to their 2.68 million members. To learn more, visit www.ASmarterChoice.org.