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Credit unions' growth continues to outpace banks'.

National Credit Union Administration data for the first half of 1993 confirmed the nation's 12,804 credit unions were in sound financial condition with strong growth prospects, according to a Veribanc, Inc. analysis.

Total credit union assets rose to $275.8 billion as of June 30, a rise of 30.5% since December 31, 1990. During the same period, deposits grew 29.2%, to $247.5 billion from $191.5 billion. In contrast, bank assets grew 3.0 and bank deposits grew 1.5% in the same period, meaning that credit unions grew 10 times faster than banks.

Credit unions' financial condition remained stable. Problem loans declined from $2.27 billion as of December 31, 1990, to $1.64 billion as of June 30, 1993. During the same period, the number of credit unions with negative equity (when discounted for problem loans in excess of loan loss reserves) dropped from 466, or 3.4% of the industry, down to 124, or 1%.

Michael J. Delmonico, vice president of Technology Federal Credit Union, San Jose, California, characterized the credit union growth rate for the period as "good but not spectacular." He attributed banks' slower-than-usual growth largely to the protracted decline in interest rates and a movement of funds out of maturing certificates of deposit and into the stock market. One reason credit unions' growth surpassed banks', Delmonico said, was that many credit unions were still getting "healthy growth from employee payroll and savings accounts, including 401(k) accounts."
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Nov 1, 1993
Words:247
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