Kansas credit unions show growth in fourth quarter

03/06/2012 5:00 AM

03/07/2012 5:59 AM

Kansas chartered credit unions grew in almost every performance category possible in the final quarter of 2011, except for the category that reflects past-due accounts.

That’s according to the Kansas Department of Credit Unions’ recently released quarterly report.

The report shows the total loans of the state’s 80 credit unions increased 6.4 percent year-over-year to $2.88 billion. Assets were up 8 percent to $4.43 billion in the same period. Credit union membership also increased by 1,434 members to 574,471.

But the biggest change was delinquencies, which during the 12-month period fell 23 percent to $28 million.

Michael Baugh, financial examiner administrator for KDCU, the regulator of state-chartered credit unions, said it was hard for him to pinpoint the exact reasons for lower delinquencies. He said the steepest year-over-year drop in delinquencies happened between the December 2010 and March 2011 period. The fourth-quarter 2011 total represents a figure that Baugh said “has remained steady throughout the year.”

Profitability also increased for Kansas credit unions. Their return on average assets was 0.80 percent compared with 0.71 percent in fourth-quarter 2010.

“Part of that, I think, was credit unions setting aside less funds as provisions for loan losses,” Baugh said. He added that credit unions also weren’t assessed a premium for National Credit Union Administration insurance, the fund that insures credit union members’ deposits.

“It was a very solid quarter performance wise,” Baugh said.

For 2012, regulators said their biggest concern is rising interest rates. John Smith, KDCU’s administrator, said credit unions that have mortgages with fixed interest rates or government- or mortgage-backed securities with low interest rates could see their net interest margins squeezed.

“We don’t know when that will happen,” Smith said of higher interest rates. But Kansas credit unions “need to be prepared for when that happens.”

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