Credit Unions Feel the Squeeze

ALEXANDRIA, Va. - Mortgage failures for CUs crept up at mid-year, holding down net income for the second quarter, NCUA reported. Real estate loans delinquent more than 60 days grew from 0.34% at year-end to 0.44% at mid-year, and foreclosed real estate loans rose to $213 million, NCUA said. Still, both the total charge-off ratio for credit unions, a mere 0.45%, and delinquency ratio, just 0.69%, remained near historic lows. The rising cost of funds, however, continued to push profitability down in the second quarter, with a return-on-assets of just 0.76%. That's slightly higher than the first quarter, 0.73%, but down from 0.82% for 2006. Loans grew by 2.2% in the second quarter, up from just 0.2% for the first quarter; while savings growth was flat, less than 1%, down from 4% growth in the first quarter. (c) 2007 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com