FOR IMMEDIATE RELEASE
Small Business Loan Growth Among Ohio Credit Unions Remains Strong; 24% Increase in Member Business Loan Originations
Annual growth figures for assets, shares, and loans all exceeded national averages in 2011
Columbus, Ohio (May 15, 2012) The demand for small business lending in Ohio remains strong, and Ohio credit unions responded with $133.2 million in member business lending (MBL) originations in 2011, up 23.7% from 2010 ($107.7 million). According to the Ohio Credit Union Quarterly Performance Summary, 105 of Ohio’s 377 credit unions reported outstanding business loan balances, representing a total of $430.5 million in outstanding balances statewide.
“Credit unions’ ability to manage a strong loan portfolio during stressful economic times is an indicator of how they can benefit the economic engine and entrepreneurial spirit of our state,” said Paul Mercer, President of the Ohio Credit Union League. “Most important, credit unions are safe, strong, and ready to do more. With prompt Congressional action on S.B. 2231, credit unions can inject $275 million into the state’s economy and create nearly than 3,000 Ohio jobs.”
S.B. 2231, the Credit Union Small Business and Jobs bill, would increase the MBL authority of credit unions from 12.25% of assets to 27.5%. The bill has garnered bipartisan support from Ohio’s Congressional delegation, including co-sponsorships from U.S. Senator Sherrod Brown (D-Ohio) and Reps. Steve Chabot (R-Cincinnati), Marcia Fudge (D-Cleveland), Marcy Kaptur (D-Toledo), Steve LaTourette (R-Bainbridge Township), Tim Ryan, (D-Niles), Steve Stivers (R-Columbus), and Betty Sutton (D-Copley).
Annual Growth Figures for Assets and Loans all Exceeded National Averages in 2011
Share balances in Ohio experienced continued strong growth during 2011. At the end of 2011, the total amount of shares deposited at Ohio credit unions stood at $19.4 billion, an increase of 5.9% from 2010. Money market deposits grew the fastest, up 13.6% over the past 12 months (Dec. to Dec.). The largest dollar increase also came from money markets, as credit union members added $453.0 million into these accounts in 2011. Consumer loan originations rose more than 19% during 2011, generating $3.5 billion in new consumer loans.
During 2011, Ohio credit unions originated $1.5 billion in first mortgages, accounting for 26.6% of total loan originations in 2011. Overall, first mortgage originations at Ohio credit unions declined 9.1% in 2011, a year after setting a record for growth in this category. Quarterly first mortgage origination figures for Ohio credit unions in 2011 did not top record levels in the second half of 2010. However, the fourth quarter of 2011 was one of the strongest quarters in Ohio credit union history, with $487 million lent.
Vehicle sales are back on the rise, up 8.9% from last year. Nationally, new and used auto loan balances increased 0.3% during 2011. Credit unions in Ohio have historically reported above-average auto loan growth and have avoided seeing the large declines experienced nationally in recent years, as balances rose by 6.3% annually. Used auto loan balances in Ohio increased 9.2% annually, as new auto balances rose 1.2% during the year. Despite competition returning to the market, auto loan market share for Ohio credit unions has improved.
Pg. 2 – Fourth Quarter Report
Ohio’s auto loan market share was 12.5% in 2011, up 30 basis points from the 12.2% captured in 2010. Credit unions nationally have seen market share drop from 15.2% in 2010 to 14.6% by the end of 2011.
Asset quality in Ohio remains stable as the delinquency rate remained flat at 1.33% in 2011. Delinquency in Ohio remains well below the national average of 1.61%. Credit card delinquencies have declined 24 basis points over the past year to 1.18%.
Membership at Ohio Credit Unions Continues Growth Trend; Credit Union Consolidation Below Average
Ohio credit unions added nearly 12,000 members during 2011, with more than 6,400 of those members coming in the fourth quarter following momentum from Bank Transfer Day. This adds up to annual growth of 44 basis points, slower than the national average of 1.4%.
During 2010, the rate of mergers and liquidations slowed significantly as only five credit unions in Ohio underwent a merger and one credit union was liquidated. The rate, though still low compared to historical rates, picked up slightly during the 2011. During the year, six credit unions underwent a merger and four were liquidated.
Revenue Impacted by Historically-Low Interest Rate Environment
Total revenue for Ohio credit unions fell 2.0% to $1.2 billion in 2011. Not an issue confined to Ohio, credit unions nationwide saw income levels slip over the past year. The major factor in revenue decline comes from the historic low-rate environment.
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, and fill in the prompted fields.
Attachments: Ohio Credit Union Quarterly Performance Summary (Fourth Quarter 2011)
The Ohio Credit Union League, with offices in Columbus, is a state trade association representing 377 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 2.69 million members. To learn more, visit www.OhioCreditUnions.org.