ATLANTA – U.S. economic growth braked sharply in the fourth quarter and while things slowed down for Georgia’s credit unions, they still finished 2015 strong with the amount of total loans growing by 3 percent over the previous quarter and 12 percent for the full year. In 2014, the year-over-year increase in total loans for Georgia’s credit unions was 11.1 percent.
The fourth quarter’s top loan performer in 2015 was second mortgages, which posted a quarterly gain of 14.3 percent and finished the year up 13.6 percent. Although it was evidence of an economic slowdown for the fourth quarter, it was a stark difference from 2014, when second mortgages declined by 1.5 percent overall.
Big gains in auto and mortgage loans over the last few years have been in large part due to pent-up demand from the recession being pushed forward. This has basically run its course. New vehicle loans remained the top loan category in 2015 with a 12-month gain of 20.5 percent and a fourth quarter increase of 1.7 percent. In fact, all loan categories finished the year in positive territory with the trend toward big-ticket purchases continuing. Used auto loans grew 1.3 percent for the quarter and 12 percent for the year. First mortgages were up 3 percent in the final quarter, with a yearly gain of 10.4 percent.
Business lending also finished 2015 strong with a 10.8 percent overall increase. This is a significant jump, as member business lending was down 3.4 percent the previous year. Other unsecured loans finished 2015 with a gain of 4.9 percent, although this category was down slightly from the 5.1 percent gain in 2014. Credit cards rounded out overall loan growth, with a 3.1 percent increase, which was up from a 2014 year-end increase of 1.8 percent.
“With a total loan growth of 12 percent for the year, it’s clear we’ve come a long way since the 2009 recession,” said Mike Mercer, president and CEO of Georgia Credit Union Affiliates. “Consumers are clearly spending with more confidence; they’re investing in big-ticket purchases like new homes and vehicles. Low interest rates have made home and car purchases especially attractive and with real estate prices now moving higher, home owners seem to be willing to put money back into their houses.”
Georgia consumers continue to see positive economic conditions across the state:
- Georgia’s unemployment rate finished the year at 5.5 percent, a major move in the right direction from December 2014, when the number was 6.9 percent.
- S. bankruptcies have been on the rise for quite some time and Georgia is not immune. There were 3,563 borrower-bankruptcy filings in 2015, up slightly from the year-end number of 3,526 in 2014.
- Georgia gas prices remained low overall in the fourth quarter. The average price per gallon in December 2015 was $1.94, down from $2.20 in September and $2.32 per gallon from December 2014.The current average price per gallon in Georgia is $1.64.
As shown in the chart below, Georgia credit unions continue to offer substantial financing advantages on a variety of loans.
|Georgia Consumer Loan Interest Rate Averages
February 11th 2016 – Source: Informa Research Services
|Product||GA Credit Unions||GA Banks||CU-Bank Difference|
|HELOC Loan –
|15 Yr. Fixed Rate Mortgage||2.91%||3.01%||-0.10%|
|Credit Card Standard||11.49%||17.33%||-5.84%|
|Credit Card Gold||9.71%||14.15%||-4.44%|
|New Vehicle – 5 Yr.||2.81%||3.70%||-0.89%|
|Used Vehicle – 4 Yr.||2.89%||4.26%||-1.37%|
According to data compiled by Informa Research Services, a $20,000 balance on a used auto loan from a credit union saves the average Georgia consumer nearly $600 over the life of the loan.
Georgia credit union savings balances rebounded in the fourth quarter of 2015, growing by 1.7 percent in a quarter that historically sees a decline in savings balances due to the holiday effect – when members typically spend their savings and/or borrow money going into the holiday season. In comparison, last year overall savings balances grew 0.8 percent in the fourth quarter of 2014. The 2015 fourth quarter gain combined with a very robust first quarter growth of 3.8 percent, worked together to produce a full year 2015 savings growth rate of 5.2 percent – another indicator of a healthy economy where consumers are able to both spend and invest.
Short term liquid accounts remained the preferred savings vehicles of credit union members as the historically low interest environment continued through the fourth quarter. Money market accounts grew by 1.5 percent for the quarter, regular savings 1.2 percent, and IRA/Keogh accounts grew by 0.9 percent. Certificates shrank by 2.1 percent.
For the year ended December 2015, both regular savings and money market accounts posted solid gains of 8.6 percent and 6.3 percent, respectively, while certificate balances fell by 7.3 percent and IRA/Keogh declined overall by 2.4 percent.
Georgia consumers clearly recognize the benefits of credit union membership. Total memberships in the state’s credit unions grew by 0.8 percent in the fourth quarter and 3.9 percent in the twelve months ended December 2015. Current Georgia memberships top the 2.1 million mark.
The information in this release is based on data from Georgia credit unions that collectively serve 92 percent of the members and manage 97 percent of the assets in credit unions throughout the state. Credit Union National Association (CUNA) collects the data from the National Credit Union Administration each year. The data is then compared to state banks with information gathered by Informa Research Services. Click here to view previous data.
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About Georgia Credit Union Affiliates Georgia Credit Union Affiliates (GCUA) provides services and support that help Georgia credit unions – with current memberships topping the 2.1 million mark – meet the financial service needs of the state’s credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 124 credit unions, with combined total assets of more than $20 billion. More information can be found at http://www.asmarterchoice.org/ and on social media at https://www.facebook.com/creditYOUnion, https://twitter.com/HPALGa and https://twitter.com/Gcuagov.