CUs Report Booming Loan Growth Of 1.2%

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Credit unions reported a 1.2% growth in loans in April, the highest loan growth since last August, according to CUNA. That brings loan growth for the first four months of the year of the year to 2.4%, the highest since 2000, according to Bill Hampel, chief economist for CUNA.

April's loan growth was led by ARM mortgages, which advanced by 3.%; home equity loans which grew 2.1%; and second mortgages, which rose by 1.8%. New car and used car loans also advanced, by 1% and 0.9%, respectively, as did fixed-rate first mortgages, by 0.6%, and unsecured personal loans, by 0.5%.

At the same time, new deposits continued to flood into credit unions, with $7.8 billion in new shares, added to credit union's books in April. The surge in new shares for April was aided by the fact hat a payday fell on the last day of the month. A total of $25.3 billion in new shares have been added over the first four months of the year. The excess of share growth over loan growth pushed the key liquidity ratio, loan-to-shares, down to 69.8%, and the net capital ratio down to 10.5% in April, from 10.7% in March.

Loan quality continued to improve, with the average delinquency ratio falling to what is believed to be an all-time low of just 0.68% at the end of April. Hampel attributed the low delinquency ratio to the expanding loan portfolios and the fact that growing portions of the portfolio are dedicated to mortgages, which have lower delinquency ratios than other types of loans.

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