Georgia Credit Unions See Continued Loan Growth in Third Quarter

ATLANTA, Dec. 16, 2014 /PRNewswire/ --

Highlights

• Total loans for Georgia credit unions grew by 4.2 percent in the third quarter, the highest third quarter growth in more than a decade.
• Economic improvement sets the stage for continued growth in lending.
• Automobile lending maintained its position as the top performing category for the quarter.

Georgia's 136 credit unions experienced continued loan growth in the third quarter of 2014. Enjoying the highest third quarter jump in more than a decade, total loans grew by 4.2 percent. The first nine months of 2014 generated loan growth of 8.9 percent (11.9 percent annualized). Since October of 2013, credit unions have recorded a 10.2 percent increase in loans.

Automobile lending maintained its position as the top performing loan category. New auto loans grew 9.26 percent in the third quarter. Used auto loans increased year-to-date by 7.6 percent (10.1 percent annualized).

"It's not a surprise that as the economy improves, consumers are looking to purchase bigger ticket items," said Mike Mercer, President and CEO of Georgia Credit Union Affiliates. "When people are considering financing options, they're looking for great interest rates and rapid approval times. But, they're often looking for trustable advice ... tough to find in the car-buying experience. That's what they get at a credit union. And the consistent growth in membership and loans shows that consumers appreciate how credit unions help them afford life."

Unsecured loans and first mortgage loans were also up in the third quarter, with those categories growing by 3.2 percent and 2.3 percent year-to-date. Commercial purpose loans declined slightly and second mortgages were stagnant at a 1.4 percent decline. Second lien mortgages generally pick up when long term rates increase ... something the experts expect to happen in 2015.  Credit card balances outstanding were down 2 percent, but those should grow substantially in the fourth quarter when holiday spending picks up.

This quarter's "Paying Attention" report also found:

• The state's unemployment rate declined to 7.9 percent from a summer high of 8.1 percent
• Georgia credit union borrower bankruptcy filings continue to decline, falling by more than 17 percent in the third quarter.

The current average rate on a 4-year used vehicle loan at a Georgia credit union is 1.01 percent points lower than average bank rates according to Informa Research Services. On a $20,000 used auto loan, the credit union advantage saves the consumer about $430 over four years. The current average rate on a standard credit card is 11.82 percent while the average rate at a bank is 16.36 percent. The credit union difference of 4.5 percentage points saves a consumer with a $5,000 balance about $130 a year.

Georgia credit union savings balances continued to decline, falling by 0.8 percent in the third quarter of 2014. Short-term liquid accounts remained favored by consumers in the face of a continued low interest rate environment. In the first nine months of 2014 credit union checking account balances grew by 5.5 percent, regular savings also grew by 5.5 percent and money market accounts increased by 1.5 percent.

Georgia consumers clearly recognize the benefits of belonging to a credit union, with total memberships in the state's credit unions growing by 2.8 percent in the third quarter (3.7 percent annualized) and by 3.1 percent from October 2013 to September 2014. 

The information in this report is based on a sample of large Georgia credit union operating results. This quarter's report is based on results of 33 percent of all Georgia credit unions that collectively serve 89 percent of the members and manage 94 percent of the assets in credit unions throughout the state. Click here to view previous "Paying Attention" reports.  

Georgia credit unions – the state's not-for-profit, member-owned alternative to banks - serve a broad cross-section of 2 million working-class consumers in the state. As not-for-profit institutions, credit unions return earnings to their members in the form of lower interest rates on loans, higher savings deposit yields and fewer and lower fees compared to banks. In the aftermath of the financial crisis, more Georgia consumers are choosing credit unions as their best financial partner.

More information about Georgia credit unions is available at www.georgiacreditunions.org, on facebook.com/creditYOUnion or on Twitter at https://twitter.com/HPALGa and https://twitter.com/Gcuagov.

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state's more than 2 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia's 136 credit unions, with combined total assets of more than $19 billion. More information can be found at www.georgiacreditunions.org.

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SOURCE Georgia Credit Union Affiliates

Related Links

http://www.georgiacreditunions.org