ALEXANDRIA, Va.-Fueled by higher bank fees and the Bank Transfer Day movement, credit unions scored some of their biggest membership gains ever in the second half of 2011, NCUA reported last week.
The nation's 7,100 credit unions added 400,000 new members in the fourth quarter-after the ill-fated September announcement by Bank of America of monthly debit fees prompted Bank Transfer Day-and a near-record 850,000 members in the final six months of the year-making almost 1.3 million new members for 2011.
That compares to an average of 1.2 million new members in each of the previous five years.
Despite a decline in the overall number of federally insured credit unions (from 7,339 to 7,094), the industry continued to add members in 2011.
The 398,000 new members added in the fourth quarter of 2011 stands in contrast to losses of 251,000 members in the fourth quarter of 2010 and loses of 218,000 in the final quarter of 2009.
The membership growth creates all kinds of new opportunities for credit unions as they put behind three lean years to record one of their fattest years ever, in terms of profitability. That meant a return on assets, or ROA, of 68 bps, up from 51 bps in 2010 and the highest in more than five years. That's including a 25 bps payment to NCUA for the corporate credit union bailout and an NCUSIF premium.
Even with the NCUA assessments, the credit union profitability indicator was better than the five-year high for banks of 0.64% announced by the FDIC earlier last week.
Other indicators are positive for the near future. Lending, which declined by more than 1% in 2010, grew by 1.2% last year; and deposit growth was up from 4.5% in 2010 to 5.2% in 2011.
For the quarter, consumer lending grew by $3.3 billion for first home mortgages, $1.5 billion for unsecured credit cards, and $1 billion for used cars. Business lending also rose to $39.1 billion on Dec. 31, a 1.7% increase for the quarter and 5.2% for the year.
Demand for non-federally guaranteed student loans grew by 10.1% during the last quarter.
In analyzing the stats for 2011, based on the year-end data submitted by more than 97% of credit unions, Callahan & Associates called last year "the most successful year ever" for the credit union movement.
"The year's performance provides ample reasons to celebrate," Callahan's EVP Jay Johnson said. "Credit unions posted the highest-ever contribution to capital and set a new record for mortgage share."
The Washington consultancy said CUs added $6.4 billion in earnings, with another $1.9 billion contributed to the NCUA insurance reserve expenses. "The NCUSIF also reported a record bottom line of $620 million, the highest ever," Callahan reported. Other positive stats include:
* Regular shares and share drafts grew at a pace of 11.3% and 12.2%, respectively.
* In 2011, members opened more than 2.3 million new checking accounts at CUs for a growth rate of 5.1%.
* The average CU relationship, including both loan and savings accounts, grew to almost $15,000.
