Credit unions overwhelmingly post positive net income, but membership lagging, report indicates

About 89% of all federally insured credit unions had positive net income during the first three quarters of the year – but all credit unions in Alaska, Maine, Nevada, New Hampshire, and Vermont had positive net earnings, the federal credit union regulator said Tuesday.

Despite that growth, however, the report also notes that membership growth at credit unions has slowed and that it has declined among mostly smaller credit unions.

In its “Quarterly U.S. Map Review, Third Quarter 2019,” the National Credit Union Administration (NCUA) also noted that the median annualized return on average assets at the credit unions was 65 basis points (bp) during the first three quarters of the year, compared to 60 bp during the first three quarters of 2018. New Mexico credit unions had the highest median annualized return on average assets during the period (99 bp), followed by credit unions in South Carolina (94 bp).

Meanwhile, asset growth at the credit unions, the agency said, for the year ending Sept. 30, 2019, was 1.9% – a bit higher compared to the same period of a year earlier (1.8%). However, the agency pointed out that at least two states saw assets recede during the period, with New Jersey credit unions dropping 1.2% in median asset growth, and Connecticut credit unions down 0.3% in median asset growth. Median asset growth was highest in Idaho (7.8%), followed by Wyoming (5.9%), the agency said.

The report also points out that while overall membership at the credit unions grew during the one-year period ending Sept. 30, it did so at 0.1% at the median. Overall, NCUA said, nearly half of federally insured credit unions had fewer members at the end of the third quarter 2019 than they did a year earlier. “Credit unions with falling membership tend to be small; about 70% had less than $50 million in assets,” NCUA reported.

The agency said that in 18 states and Washington, D.C., median membership growth was negative. At the median, membership declined the most in Pennsylvania (down 1.4%) and Illinois (down 1% ). Membership was unchanged in Louisiana, Maryland, and West Virginia. On the other hand, credit unions posting the highest median membership growth rates were in Alaska (2.4%) and Wyoming (2.2%).

NCUA: Q3 2019 State Credit Union Data Report Now Available

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