Credit unions improved their net worth ratios in the third quarter compared to the previous quarter, and kept their return on aggregate average assets stable, according to call report results released Monday by their federal regulator.
The National Credit Union Administration (NCUA) said the federally insured credit unions posted an aggregate net worth ratio (net worth as a percentage of total assets) of 10.23% at the end of the third quarter, up from 10.16% at the end of the previous quarter. Compared to a year earlier (third-quarter 2020) when the ratio was 10.44%, the ratio had declined. However, it bottomed out in the first quarter of the year at 10.02% and has been climbing, quarter by quarter, since then.
Return on average assets – a broad indicator of credit union profitability overall– was 112 basis points in the third quarter, NCUA said, the same as posted in the second quarter, but up from 65 basis points in the same period a year earlier.
The median credit union return on assets, NCUA noted, in third-quarter 2021 was 56 bp, up from 42 bp a year earlier – and up from 46 bp a quarter earlier.
Other key federally insured credit union performance indicators released by the agency for the third quarter (and changes from the year before) included:
- Assets rose to $2.02 trillion, a 12.9% increase ($231 billion).
- Memberships topped out at 128.6 million, a 4% change (4.9 million).
- Loans stood at $1.22 trillion, up 5.8% ($67 billion).
- Insured savings and deposits were $1.6 trillion, up 4% ($189 billion).
- Net interest margin was $50 billion, or 2.59% of average assets – up from $48.1 billion, but down as a percentage of average assets, which was 2.87%.
- The number of federally insured credit unions was 4,990, down from 5,133 – continuing a decline in the number which the agency said was “consistent with long-running industry consolidation trends.”