Participants in NAFCU's Flash Report Survey saw their loan-to-share ratio decline in January over December, despite strong loan growth.
The reason, of course-even stronger deposit growth. Credit unions that participate in the Flash Report had an average loan-to-share ratio of 77.4% in January, down slightly from 78.7% in the last month of 2004. Those same CUs also reported that asset quality deteriorated during January, according to NAFCU, with charge-offs increasing 0.66% from .50%, and delinquencies rising to 0.53% from 0.49%.
NAFCU's economists are projecting that economic activity during the first quarter of 2005 will grow 4%, with real GDP forecast to be approximately 3.9% for the year. "Due to the increase in inflationary expectations, the weak dollar, the changing composition of demand for Treasuries, and the large fiscal and trade deficits, long-term interest rates are likely to move substantially higher this year," NAFCU predicted.
Participants' loan growth for the 12 months ending in January 2005 was 11.3%, down slightly from the 11.4% the previous month. January's loan expansion was 0.20%, following a 1% increase during December.
* Real estate-secured lending accounted for 64% of the $41.4 billion in loan growth.
