Credit unions in Mississippi are sailing along on smooth waters during rocky economic times, thanks to conservative and prudent lending and investing practices.

Institutions located in Jones County such as Central Sunbelt Federal Credit Union, Hattiesburg-Laurel Federal Credit Union and Ellisville State School Employees Credit Union are part of the positive financial picture experienced in 2008, state officials say.

The Mississippi Credit Union Association represents 99 credit unions with over 530,000 members throughout the state. Nationally, credit unions claim 87 million Americans who are members of 8,000 individual credit unions.

Financially-speaking, Mississippi’s credit unions are near the top of the national list, with more than $454 million in total net worth and assets of $3.5 billion at years-end 2008. The net worth (capital) ratio was 12.98 percent, well above the national average of 10.9 percent.

And the sound financial news doesn’t end there.

Mississippi credit unions had net income of $27.8 million during 2008. The net return on assets was 0.80 percent, or 80 basis points compared to the national average of 0.31 percent. Loan delinquencies remained low at 1.2 percent, well below the national average of 1.37 percent, officials said.

Charles Elliott, MSCUA President and Chief Executive Officer, further explains the reasons behind credit unions’ profitable status.

“Credit unions have done an excellent job of building capital by managing asset growth, making good loans and producing a positive bottom line,” Elliott said. “Some financial institutions offered mortgage loans with very low interest rates that readjusted to a higher rate, causing delinquencies. By contrast, we offer fixed rate loans. And traditionally, we offer lower rates on loans while providing higher rates on savings.”

Elliott emphasizes that no member has ever lost any money in a Mississippi credit union. Savings are insured by the National Credit Union Share Insurance Fund, a federal agency similar to the Federal Deposit Insurance Corporation (FDIC) that oversees banks.

The NCUSIF, backed by the U.S. Government, provides credit union members with coverage for their individual share or savings account to $250,000, the same as FDIC insured banks, Elliott said.

“In the history of the NCUSIF, not one penny of insured savings has even been lost by a member of a federally insured credit union,” Elliott said. “Overall, credit union safety should provide members a source of comfort during difficult economic times. Mississippi credit unions are well positioned to continue to provide member-owners with an opportunity to improve their financial well-being.”

Credit unions are not-for-profit financial cooperatives, which means they are not in business to make a profit. Instead, Elliott says, earnings are returned to credit union members in the form of low loan rates, higher interest on deposits and lower fees, all of which are valid reasons why people should consider joining credit unions.

Credit unions came into existence during the Great Depression, when many Americans didn’t have access to credit. They are mutually-owned organizations and each member, regardless of the amount in a savings account, can vote on policy issues and directors.

Although a majority of credit unions were employer based, that has changed over the years as companies opened and closed, sometimes without any warning to members.

Today, a credit union may include members from several employer groups, and virtually anyone can join as long as they are members of a qualifying group. Because federal law says credit unions cannot serve the general public, people can qualify to join through their employer or organizational affiliations like churches, schools, community or social groups.

Dion Williams, President and CEO of Central Sunbelt Federal Credit Union in Laurel, says his institution was originally founded in 1953 as Masonite Employees Federal Credit Union. As additional companies were added into the field of membership, the company-affiliated name was later changed to its present one.

Today, the credit union employs over 50 at two branches in Laurel and two in Hattiesburg. Like the rest of the state’s credit unions, Central Sunbelt is doing well despite the country’s financial downturn.

“We are having an outstanding year,” Williams said. “Compared to the last couple of years, membership is growing strong and loans have really picked up in the second quarter. To further illustrate that we are moving forward, we are renovating two branches to accommodate for growth as well as adding new services.”

Williams is quick to credit the beneficial effect that a Jones County location has on his organization.

“Dating back to the days of Masonite Employees Federal Credit Union, Central Sunbelt has been a fixture for over 50 years in the Pine Belt region and this means a lot to our members,” Williams said. “Through the years, we have managed our organization in a manner so that more than adequate reserves were established for ‘rainy days.’ Plus, we stick to the basics by focusing on consumer lending, such as new and used cars, personal loans and credit cards and responsible mortgage lending. In short, we offer the conveniences of modern financial services along with the tradition of branch locations and friendly folks to serve members.”