Much fanfare has been made over credit unions' membergrowth resurgence over the past 18 months. It's been wonderful towitness, and with the hard work of the entire credit unioncommunity, it can continue in perpetuity.

Loans are up, assets are up and membership is up—a winningtrifecta. Loan growth for the 12-month period ending March 31reached 4.9%, according to data recently released by the NCUA. Thiswas more than double the percentage points achieved in the prioryear. Lending is on the mend, to the point there's debate amongobservers over whether we're heading for a second housingbubble.

Mortgages did lead credit unions' loan growth in April at 2.1%growth, data from CUNA showed. Don't worry NCUA, they areadjustable-rate loans. Next came unsecured personal loans followedby used and new auto loans, according to CUNA. In fact, new autoloans accounted for 10.7% of credit unions' loan portfolio, up from10.1% a year ago. Used autos are up to 19.5% of loans versus 18.8%a year ago.

The NCUA reported that credit unions in 49 of the 54 states andterritories demonstrated loan growth, with Idaho taking the lead at12.4% loan growth, and Oklahoma was nipping at its heals with12.2%. Nevada credit unions continued negative loan growth,declining 8.8%.

Nevada was the only state that did not experience asset growthover the 12 months ending March 31, the NCUA stated. The economicsituation remains difficult there, but there are some good creditunions, like One Nevada FCU, that are working to make a difference in theeconomically depressed state. Keep doing good work to help digout.

ROA dipped a bit to 83 basis points from 85 bps year-over-year,according to the NCUA. Utah experienced the highest ROA of 155 bps,which is not surprising with credit unions like Mountain America CU, American First CU and myriad others. Unfortunately, tinyDelaware was home to the credit unions with the lowest ROA at 26bps. Still, by CUNA's data, credit unions' ROA has been steadilyclimbing out of despair since 2009. Stay the course!

The federal agency pointed out that 71% of credit unions boastedpositive ROA in the first quarter, but that means 29% experiencednegative ROA. A business, even a not-for-profit one, cannot sustainthat. Regulatory and financial uncertainty have kept credit unionsfrom merging at a faster pace, some out of necessity and some asstrategy, but that will soon change as the economy continues tostabilize and regulatory changes become deeply engrained in creditunions' operations. Larger credit union combinations, such as themerger between First Community FCU and E&A CU in Michigan,are bound to become more common as credit unions search for scaleto compete, comply and carry on.

We'll see more failures of smaller credit unions and less-than-voluntary mergers, despitevaliant efforts by the NCUA, the National Federation of CommunityDevelopment Credit Unions and others. Tom Glatt Jr., of Glatt Consulting issued a report showing that his firm'sHealthScore found that credit unions in aggregate aren't as healthyas they were a year ago. The decline was driven by smaller creditunions. Overall, his firm's HealthScore ranked credit unions at2.446, but those credit unions with less than $2 million in assetsaverage 1.722, and those from $2 million to $10 million scored2.095. NCUA Director of the Office of Small Credit Union Initiatives BillMyers got laughs for his story about when he was greeted by amanager, who ran the credit union out of his home, in slippers.It's a funny anecdote until you think about it. He added that 30credit unions were still not on computers. The cost to examinethese credit unions, the hours, and lack of security, among other things, just doesn't makesense.

In addition to loan growth finally picking up, credit unions areexperiencing tremendous membership growth. NCUA's data showedmembership expanding 2.3% nationally among federally insured creditunions, which is even higher than the 2.0% growth experienced theyear before. At the same time, share growth is trickling downward,setting credit unions up for increased loan-to-share ratios andincome, even as delinquencies continue to decline.

Credit unions are coming out the other side now, so upward andonward in the fight to educate members while saving them money,making their lives richer.

Sarah Snell Cooke
Publisher/Editor in Chief
[email protected]