Total Assets Hit $569B At Year-End

Register now

Year-end data for the nation's 9,895 credit unions shows share growth reaching double-digits for the second consecutive year, according to analysis by Callahan & Associates.

Shares grew 11.8% in 2002, down from 2001's surging 14.7% growth. That growth drove total assets at year-end to $569 billion in assets, up from $507 billion in December 2001.

Callahan's said the low rate environment of 2002 helped drive performance.

"Although interest rates stayed consistently low throughout the year, total income dropped only 1%, partially due to a 15% increase in fee income," noted Callahan EVP Jay Johnson.

Total expenses rose 10.5%, as credit unions continued to spend more on employee compensation and loan servicing. The superior performance stemmed from the 23% decrease in cost of funds, which in turn boosted net income by an extraordinary 31%, Johnson said.

The increase in net income pushed the industry's return on average assets to 1.07% from 0.95% in 2001.

"In 2002, credit unions really demonstrated that they can thrive in a low-interest rate environment," Johnson added. "The share and loan growth rates indicate that members continue to realize value in their credit unions membership, while the strong bottom line results show how well credit union managers handled the drastic changes in the economic environment."

Other findings:

Loan growth reached 7.1% in 2002, up slightly from the 6.7% growth experienced in 2001.

Loan growth slowed considerably during the fourth quarter.

The loan-to-share ratio declined to 70.7% from 73.8% at year-end 2001. Asset quality remained excellent as the delinquency ratio remained steady at 0.8%, while net worth-to-assets decreased slightly to 10.7%.

For reprint and licensing requests for this article, click here.