The National Credit Union Administration on Wednesday released its
Key numbers from NCUA's second-quarter data
September 4, 2019 3:03 PM
Loan growth on the decline
Once again, loan balances increased year over year in most major categories but total loans continued to grow at a slower pace. Overall loans outstanding rose more than 6%, to $1.1 trillion. However, that was slower than the four-quarter growth rate of 7.9% posted in the first quarter. The average loan balance inched up by 1.5%, to $15,458, from a year earlier.
At the same time, credit quality improved. The delinquency rate fell 4 basis points, to 0.63%, and the net chargeoff ratio was 0.56%, down 4 basis points.
Once again the largest credit unions reported the biggest jump in loan growth. Institutions with at least $1 billion in assets posted 9% growth in lending. In comparison, credit unions with less than $10 million in assets had a roughly 3% decline in loans.
At the same time, credit quality improved. The delinquency rate fell 4 basis points, to 0.63%, and the net chargeoff ratio was 0.56%, down 4 basis points.
Once again the largest credit unions reported the biggest jump in loan growth. Institutions with at least $1 billion in assets posted 9% growth in lending. In comparison, credit unions with less than $10 million in assets had a roughly 3% decline in loans.
Loans by category
Loan balances rose in most major categories, an improvement over the second quarter of 2018.
Auto loans, historically a major driver of growth for the industry, saw modest gains, rising 5.2% overall to $370.5 billion. Used auto loans specifically were up 5.3% ($11.3 billion) while new auto loans rose by 5.1% ($7.2 billion).
Credit card balances surged almost 8%, to $62.4 billion while commercial loans jumped more than 11%, to $75.5 billion. Loans backed by 1- to 4-family residential properties totaled $456.7 billion, up 6% from a year earlier, while non-federally guaranteed student loans were up 14.6% to hit an industry-wide total of $5.3 billion.
Auto loans, historically a major driver of growth for the industry, saw modest gains, rising 5.2% overall to $370.5 billion. Used auto loans specifically were up 5.3% ($11.3 billion) while new auto loans rose by 5.1% ($7.2 billion).
Credit card balances surged almost 8%, to $62.4 billion while commercial loans jumped more than 11%, to $75.5 billion. Loans backed by 1- to 4-family residential properties totaled $456.7 billion, up 6% from a year earlier, while non-federally guaranteed student loans were up 14.6% to hit an industry-wide total of $5.3 billion.
Asset growth remains steady
Total assets at federally insured CUs were up 6.3% or $91 billion at the end of the second quarter, nearly identical to the year-over-year increase seen in the agency’s 1Q data.
The industry’s net worth was up 8.9% ($14 billion) year over year to $171.4 billion, though net worth as a percentage of assets stood at 11.27%, an increase from 11.01% one year prior.
Overall shares and deposits in the industry were up 6% on the year to hit $1.28 trillion, a $72.1 billion increase from June 30, 2018. Regular shares saw a lift of 2.5%, to $458.5 billion, while other deposits rose 8.7% to hit $632.3 billion. Share certificate accounts led the growth in that category with a whopping 20.5% increase, or $45.1 billion.
ROA stood at 97 basis points for the year, up from 90 basis points at the end of June 2018. Median ROA was 63 basis points, a 12-point lift from the same period one year prior.
The industry’s net worth was up 8.9% ($14 billion) year over year to $171.4 billion, though net worth as a percentage of assets stood at 11.27%, an increase from 11.01% one year prior.
Overall shares and deposits in the industry were up 6% on the year to hit $1.28 trillion, a $72.1 billion increase from June 30, 2018. Regular shares saw a lift of 2.5%, to $458.5 billion, while other deposits rose 8.7% to hit $632.3 billion. Share certificate accounts led the growth in that category with a whopping 20.5% increase, or $45.1 billion.
ROA stood at 97 basis points for the year, up from 90 basis points at the end of June 2018. Median ROA was 63 basis points, a 12-point lift from the same period one year prior.
More members, fewer CUs
The number of federal credit unions continues to exceed state charters by a wide margin, with 3,335 FCUs in business at the end of June compared with 1,973 federally insured state-chartered institutions. Overall, the number of federally insured credit unions in operation declined by just over 3%, from 5,480 at the end of 2Q 2018 to 5,308 at the end of 2Q 2019. Those figures are consistent with historical consolidation trends across the industry.
Despite the decrease in overall institutions, the number of CUs with a low-income designation was up at the end of the second quarter, up 2.9% from 2,544 to 2,618.
Credit union membership continues to grow, though the pace has slowed from its historical peak in the early years of this decade. As of June 30, 118.3 million Americans were credit union members, an increase of 4.3 million members year over year.
Despite the decrease in overall institutions, the number of CUs with a low-income designation was up at the end of the second quarter, up 2.9% from 2,544 to 2,618.
Credit union membership continues to grow, though the pace has slowed from its historical peak in the early years of this decade. As of June 30, 118.3 million Americans were credit union members, an increase of 4.3 million members year over year.
Net income trending strong
Earnings at federally insured credit unions surged in the second quarter. Net income totaled $14.4 billion, up more than 13% from the same period a year earlier. The return on average assets was 0.97%, up 7 basis points year over year.
Interest income surged almost 16%, to $60 billion, while noninterest income increased about 4%, to $20.6 billion.
However, expenses also increased. Interest expense soared by roughly 46% to $12.7 billion, from a year earlier. Noninterest expenses grew by 8%, to $47.1 billion, with rising labor costs accounting for more than half of the uptick.
Interest income surged almost 16%, to $60 billion, while noninterest income increased about 4%, to $20.6 billion.
However, expenses also increased. Interest expense soared by roughly 46% to $12.7 billion, from a year earlier. Noninterest expenses grew by 8%, to $47.1 billion, with rising labor costs accounting for more than half of the uptick.
