Funds Drain From CU Movement

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ALEXANDRIA, Va. - (12/22/05) – More than $7.2 billion inregular deposits exited credit unions in the third quarter of theyear, continuing a trend that has stymied credit union leaders formost of this year. NCUA reported Wednesday that regular sharesdeclined by 2.4% from July through September, the second quarter ina row of negative growth for the core credit union deposits.Through the first nine months of 2005 regular shares have grownless than 1%, believed to be the lowest growth rate ever for creditunions, while total shares, including share drafts and certificatestoo, have grown less than 4%, as rates for credit union savingsproducts hold near record lows. The record-low share growth haspushed down profitability, with third quarter return-on-averageassets of just 0.93%, the same as in the second quarter, and near adecade low. Loan growth was strong in the third quarter, 4%,pushing growth for the first three quarters of the year to ahealthy 9%. For the third quarter new car loans led the way,expanding by 9%, while first real estate mortgages grew by 3.4%,other mortgages, which includes home equity loans, by 5.2%, andunsecured credit card loans by 2%. For the first time on more thanfive decades, the number of credit unions fell below9,000.

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