Credit unions’ 12-month loan growth declines in third quarter as deposit growth rises; ROAA up

Federally insured credit unions (FICUs) saw continued, albeit slowing, loan growth during the four quarters ending Sept. 30, with total loans growing 5.9% during the period, down from 9.5% for the same period ending 12 months ago, according to call report data released Friday.

The data, released by the National Credit Union Administration (NCUA), showed loans rising $60.7 billion during the four-quarter period ending Sept. 30 to a total of approximately $1.1 trillion. In the four quarters ending Sept. 30, 2018, loans were up $89.5 billion, pushing total lending past the $1 trillion mark for the first time.

Deposits in credit unions grew $83.7 billion, or 6.9%, during the four quarters ending this Sept. 30, outpacing the four-quarter growth reported in September 2018 of $57.9 billion (5%).

Growth in uninsured shares and deposits – meaning those not guaranteed by the National Credit Union Share Insurance Fund (NCUSIF) – was $71.8 billion, or 6.3%, in the four quarters ending this Sept. 30, down from the 4.8% growth reported for the same period ending Sept. 30, 2018.

The data show that FICUs’ return on average assets (ROAA) was 98 basis points (bp) over the year ending in the third quarter of 2019, up from 96 bp in the third quarter of 2018. The median ROAA across all FICUs was 65 bp, up 5 bp from the third quarter of 2018.

NCUA said there were 5,281 FICUs as of Sept. 30; that’s down 27 from June 30 and down 155 from Sept. 30, 2018. It reported a total of 119.6 million members Sept. 30, up 1.3 million for the quarter and up 4.1 million since Sept. 30, 2018.

The agency added that beginning with this quarterly data report, it has added a spreadsheet that lists all FICUsactive as of Sept. 30, including key metrics.

In other third-quarter data, the agency report shows:

  • Total assets in federally insured credit unions rose by $98 billion, or 6.8%, over the year ending in the third quarter of 2019, to $1.54 trillion.
  • The average outstanding loan balance in the third quarter of 2019 was $15,530, up $262, or 1.7%, from one year earlier.
  • The delinquency rate at federally insured credit unions was 67 bp in the third quarter, unchanged from one year earlier. The net charge-off ratio was 55 bp, down from 57 basis points in the third quarter of 2018.
  • Insured shares and deposits rose $72 billion, or 6.3%, over the four quarters ending in the third quarter of 2019, to $1.2 trillion.
  • The loan-to-share ratio stood at 84.1% in the third quarter of 2019, down from 84.9% in the third quarter of 2018.
  • The credit union system’s net worth ratio was 11.39% in the third quarter of 2019, up from 11.21% one year earlier.
  • Net income totaled $14.7 billion at an annual rate in the third quarter of 2019, up $1.1 billion, or 8%, from the same period a year ago.
  • The net interest margin for federally insured credit unions was $47.7 billion in the third quarter of 2019, or 3.2% of average assets. That compares with $44 billion, or 3.1% of average assets, in the third quarter of 2018.

The agency reported that in the third quarter of 2019, there were 3,321 federal credit unions and 1,960 federally insured, state-chartered credit unions; it noted the year-over-year decline is consistent with long-running industry consolidation trends.

NCUA Releases Q3 2019 Credit Union System Performance Data

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