Assets grow 8.8% at credit unions in year ending March 31; ROAA dives 42bp

Federally insured credit unions’ total assets grew $132 billion, or 8.8%, over the 12-month period ending March 31, totaling $1.64 trillion, according to first-quarter industry data released Wednesday by the National Credit Union Administration (NCUA) that also showed a huge dip in return on average assets during the same period.

However, FICUs’ return on average assets (ROAA) 53 was basis points in the first quarter of 2020, down from 95 bp in the first quarter of 2019. The NCUA noted, however, that the median ROAA across all federally insured credit unions was 41 bp, down 14 bp from the first quarter of 2019.

Net income totaled $8.4 billion at an annual rate in the first quarter, down $5.6 billion, or 40%, from the same period a year ago. “The decline was due in part to a jump in provisioning for loan and lease losses or credit loss expenses,” the agency said.

As of March 31, loans had grown 6.5% over the past 12 months to a total of approximately $1.1 trillion, while shares and deposits rose 8.1% to a total of about $1.38 trillion, the report shows.

As of March 31, there were 5,195 FICUs with membership totaling 121.4 million. Of those, 4.1 million members were added during the first quarter of this year, the agency reported.

In other first-quarter data, the agency reported:

  • The loan delinquency rate at FICUs was 63 bp in the first quarter of 2020, up 6 bp from one year earlier. The net charge-off ratio was 58 bp, up slightly from 57 bp from a year ago.
  • Insured shares and deposits rose $89 billion, or 7.5%, over the past year.
  • FICUs’ loan-to-share ratio stood at 81.1% in the first quarter, down from 82.4% a year ago.
  • The credit union system’s net worth ratio was 11.01% as of March 31, down from 11.13% one year earlier.
  • The net interest margin for federally insured credit unions was $47.3 billion in the first quarter of 2020, or 3% of average assets. That compares with $46.9 billion, or 3.2% of average assets, in the first quarter of 2019.
  • FICUs’ return on average assets (ROAA) 53 bp in the first quarter of 2020, down from 95 bp in the first quarter of 2019. The median return on average assets across all federally insured credit unions was 41 bp, down 14 bp from the first quarter of 2019.
  • The number of federally insured credit unions declined to 5,195 in the first quarter of 2020, from 5,335 in the first quarter of 2019. In the first quarter of 2020, there were 3,255 federal credit unions and 1,940 federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-running industry consolidation trends.
  • The number of credit unions with a low-income designation rose to 2,631 in the first quarter of 2020 from 2,571 one year earlier.

NCUA Quarterly Credit Union Data Summary 2020 Q1

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