Real estate, auto loans drive growth in Kansas credit unions

Kansas credit unions saw growth in their loan balances in 2011, according to a report released this week by the Kansas Credit Union Association and industry consulting firm Callahan & Associates.

The report, based on a compilation of data from 101 Kansas credit unions for the fourth quarter of 2011, said total loans were $3.13 billion, a 5.88 percent increase from the fourth quarter of 2010. Kansas’ growth exceeded the national rate of 1.14 percent in the same period.

Driving the growth in Kansas credit unions’ loan portfolios were real estate and auto loans. Real estate loan balances grew 9.48 percent to $968 million, and auto loans increased 5.93 percent to $1.77 billion, the report said.

Among Kansas auto loans, the growth was exclusive to used vehicle sales, the report said. Bob Mayes, vice president of member and strategic services for the KCUA, said credit unions are typically strongest in used car sales because they can offer competitive rates.

It is more difficult to compete on new auto loans, though, because of automakers’ financing units that offer loans with more competitive terms, such as zero percent for 72 months.

“They tend to grab more of the new car loans,” Mayes said.

Credit unions’ business loan originations fell 14.7 percent in the state year over year, but outstanding balances increased 3.2 percent in the period, the report said.

While loan balances grew in 2011, the rate of delinquencies — including for real estate, credit card and other consumer loans — moved lower to 0.96 percent from 1.13 percent in 2010. During that period, credit union delinquencies nationally also fell, to 1.61 percent.

According to the report, Kansas credit unions also:

•  Added 14,638 members in 2011, a 2.4 percent increase from 2010.

•  Increased net income 14.65 percent to $35.9 million.

•  Lowered their provision for loan losses by 9.9 percent, to $20.5 million.

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