ATLANTA – Georgia credit unions started 2016 with a solid 2.5 percent first quarter increase in overall lending. This performance continues the 12.6 percent annual growth rate experienced in 2015.
The first quarter’s top performer in 2016 was new auto loans, which grew 5.6 percent over the previous quarter. Used auto loans posted a 3.7 percent quarterly growth rate. Other loan categories that grew since the last quarter of 2015 included first mortgages, which rose by 2.6 percent; and business lending, which grew 2.5 percent.
Among the decliners in the loan portfolio were credit cards, which dropped by 4.7 percent in the first quarter of 2016; other unsecured loans fell by 2.3 percent in the first quarter. This is typical seasonal behavior as credit union members pay down debt incurred over the holidays.
Economic conditions across the state:
- Georgia’s unemployment rate remained at 5.5 percent during the first quarter, a significant improvement from the 3-year high of 7.4 percent in 2014.
- S. bankruptcies have been on the rise and Georgia is not immune. There were 3,563 credit union borrower-bankruptcy filings in 2015, up slightly from 3,526 in 2014. Georgia credit union borrower-bankruptcies grew in the first quarter of 2016 by 2.83 percent over the first quarter of 2015 – with 1,273 bankruptcies filed.
- S. drivers paid less for gasoline in the first quarter of 2016 than at any other time in the past 12 years. The national average price for a gallon of regular gasoline in the first quarter was $1.86. During the summer driving season of 2016, U.S. regular gasoline retail prices are forecasted to average $2.21 a gallon, 42 cents a gallon lower than last summer. More broadly, lower energy costs have contributed substantially to the economic well-being of Georgia consumers.
“All things considered, Georgia credit unions continue to experience positive economic conditions,” said Mike Mercer, Georgia Credit Union Affiliates president and CEO. “This is reflected in strong loan growth at Georgia credit unions.”
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
May 20th 2016 – Source: Informa Research Services
|Product||GA Credit Unions||GA Banks||CU-Bank Difference|
|HELOC Loan –
|30 Yr. Fixed Jumbo Mortgage||3.46%||3.64%||-0.18%|
|Credit Card Standard||11.51%||17.51%||-6.00%|
|Credit Card Platinum||9.02%||11.32%||-2.30%|
|New Vehicle – 4 Yr.||2.33%||3.48%||-1.15%|
|Used Vehicle – 2 Yr.||2.73%||4.14%||-1.41%|
According to data compiled by Informa Research Services, a $30,000 balance on a new vehicle loan at a Georgia credit union saves the average Georgia consumer more than $700 over the life of the loan.
Georgia credit union savings balances grew 4.4 percent the first quarter of 2016 over the fourth quarter of 2015, nearly matching the full trailing twelve-month growth rate of 5.6 percent. Personal savings have been riding high since the late 2000s, according to U.S. News and World Report, when the Great Recession forced millions in the U.S. to pull back on spending.
Interest rates remain at historical lows. Regular savings accounts, checking accounts, and money market accounts posted gains of 6.9 percent, 6.3 percent, and 4.0 percent respectively in the first quarter of 2016. Credit union savings balances typically grow faster in the first quarter despite historically low interest rates. This is because consumers are less inclined to splurge following the holiday season. Tax refunds also play a part in savings account growth.
Georgia consumers clearly continue to recognize the benefits of credit union membership. Total memberships in the state’s credit unions grew by 0.9 percent, bringing the total number to 2.12 million, proportionate to the annual rate of 4.0 percent in the twelve months ended March 2016. In contrast, big banks are losing customers. According to a 2015 study by management consultancy cg42report, 23 percent of customers at 10 banks were looking to switch financial institutions in the next 12 months – and 8 percent were projected to actually do so.
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.
# # #
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 121 credit unions, with combined total assets of more than $21 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.